Methods and systems for optimizing escheat and derecognition of prepaid cards, stored value cards, credit memos and electronic payment instruments

ABSTRACT

Methods, processes, and systems architecture utilized to integrate key attributes of the unclaimed property laws of the states of the United States and other jurisdictions, along with certain generally accepted accounting principles, into a rules-based processing platform that processes, positions, and manages prepaid cards, stored value cards, and other payment instruments with respect to escheat under the unclaimed property laws and derecognition under the accounting standards are provided. A systems architecture platform aggregates transaction data and other information and processes escheat and derecognition for the payment instruments. Each instrument in a portfolio is individually positioned and individually repositioned into single or multiple footprint systems using one or more issuers to achieve optimum compliance with escheat laws while either minimizing or maximizing the breakage that is subject to escheat. Each instrument also is individually positioned and individually repositioned with respect to derecognition to optimize compliance with applicable accounting principles while managing the breakage that is not subject to escheat.

CROSS-REFERENCE TO RELATED APPLICATIONS

This application claims priority pursuant to 35 U.S.C. 119(e) to U.S.Provisional Patent Application Ser. No. 61/074,557, filed Jun. 20, 2008,the entire disclosure of which is incorporated herein by reference.

FIELD OF THE INVENTION

The present invention relates to methods, processes, and systemsarchitecture utilized to integrate key attributes of the unclaimedproperty laws of the states of the United States and otherjurisdictions, along with certain generally accepted accountingprinciples, into a rules-based processing platform that processes,positions, and manages prepaid cards, stored value cards, and otherpayment instruments with respect to escheat under the unclaimed propertylaws and derecognition under the accounting standards. A systemsarchitecture platform aggregates transaction data and other informationand processes escheat and derecognition for the payment instruments.Each instrument in a portfolio is individually positioned (definedbelow) and individually repositioned (defined below) into single ormultiple footprint systems (defined below) using one or more issuers toachieve optimum compliance with escheat laws while either minimizing ormaximizing the breakage (defined below) that is subject to escheat. Eachinstrument also is individually positioned and individually repositionedwith respect to derecognition to optimize compliance with applicableaccounting principles while managing the breakage that is not subject toescheat.

BACKGROUND OF THE INVENTION

Each of the states and most territories of the United States and severalforeign countries or their sub jurisdictions have enacted or promulgatedunclaimed property laws or regulations that proclaim property to beabandoned after a period of dormancy or inactivity by the owner of theproperty. These laws require the holder of the abandoned or unclaimedproperty to return the property to its rightful owner or escheat theproperty to the treasury of the applicable jurisdiction.

As technology advances, new products will give rise to intangibleproperty rights that are subject to escheat. Therefore, the impact ofescheat upon new technologies must be evaluated and complianceimplemented as required. This impact is substantial with respect to agroup of products recently developed by the financial services, retail,and payment instrument industries. These sectors have created paymentinstruments that use electronic systems or devices to carry out thepayment. Examples of the payment systems or devices are magnetic stripecards, chip based cards, wireless phone chip devices, and the like.Examples of the payment instruments are prepaid cards, stored valuecards, gift cards, credit memo accounts or cards, loyalty or affinitypoints or cards, rebates, promotional cards, awards or incentive pointsor cards, health savings account cards, government benefit cards,payroll cards, per diem cards, prepaid minutes from wireline or wirelesstelephone companies, electronic coupons or certifications, mobile chippayment systems, and the like. Each of these products or services(hereinafter “cards” or “card”) creates intangible property rights thatmay be subject to escheat.

These cards are sold or issued by financial institutions, retailers,third party distributors, and other issuers (hereinafter “issuers” or“issuer”) for use by businesses, consumers, or other end-users. Thecards usually are sold in a program or portfolio (hereinafter a“portfolio” or “program”) through which a particular card is designed,marketed, and distributed for use by targeted end-users. An example isan open-loop Visa rebate card issued by a retailer that may be used by arecipient anywhere that accepts Visa. Another example is a closed-loopgift card issued by a retailer that may be used by the gift recipientonly at the issuing retailer. A third example is a payroll cardsponsored by a bank that may be used like a debit card. In eachportfolio, funds are loaded on or remitted to buy the card by thepurchaser, the card may be used by an end-user for its designatedpurpose, and the card is honored by the issuer upon use.

These cards are marketed and used throughout interstate commerce. As aresult, they give rise to unclaimed property issues that cut acrossjurisdictional lines. The cards may be sold by an issuer incorporated inone state with its principal place of business in another state. Theymay be sold from outlets in multiple states to buyers residing invarying states. The buyers may retain the cards, or gift or give them torecipients or end-users located in varying states. The buyers,recipients, and end-users may use the items in other states. Ifreloadable, the cards may be reloaded in varying states. These statesmay shift, from time to time, as the locations of buyers, end-users, orissuers move. Therefore, as the cards become inactive or dormant overtime, the cards may become subject to the escheat laws of severaldifferent jurisdictions.

Determining which jurisdiction's escheat laws may apply to cards andinstruments has substantial economic impact upon the issuers of theitems. When a card is not used or redeemed by an owner (sometimes called“breakage”), the issuer holding the obligation to honor the card mustdetermine the escheat status of the item by evaluating the escheat lawsof numerous jurisdictions in light of varying applicable factualscenarios. In some jurisdictions, the issuer may be permitted to retainall or a portion of this breakage. In other jurisdictions, a completelydifferent result may apply. Furthermore, the issuer's objectives mayvary. Some may wish to minimize escheat, while others may desire tomaximize escheat in certain circumstances (for example to take advantageof the statutory release of the issuer's liability to the end-user of aninactive instrument or card).¹ ¹The breakage in a portfolio gives riseto revenue generating opportunities for an issuer. It creates float orcash flow. It may be harvested by fees or expiration dates if permittedby law. And it may be subject to derecognition (described below) withattendant income or earnings. Escheat bars or limits these opportunitiesin that breakage is remitted to a jurisdiction upon escheat.

Determining which jurisdiction's escheat laws may apply to cards alsohas substantial impact upon the end-users of the items. When escheat isrequired and carried out by an issuer, the escheat process likely willbe a materially adverse and invasive event for the end-user. Uponescheat, the issuer's obligation to honor the card will be released, andthe ability of the end-user to use the card, as intended and expected,will end. The end-user will be required to locate the card where it wasescheated, and engage in a cumbersome process of reclaiming the item.These problems are pronounced for many of the card types listed above.The items usually are small dollar items rendering the reclamationunattractive, and the card owners may be anonymous making reclamationdifficult to process.² ²Determination of which jurisdiction's escheatlaws may apply to a program also may have substantial impact upon thefeatures of a program. Many programs are designed so that the cards donot expire, and an issuer may promote a “no expiration” feature as afavorable attribute of a program. While escheat is not an expirationdate, it may have a similar impact upon a card when the card is shutdown upon escheat.

The standards applied in unclaimed property laws for cards have acorrelation to certain generally accepted accounting principles. Theescheat laws of several jurisdictions require intangible property to beescheated when abandoned or unclaimed. Payment cards are items ofintangible property that may be subject to such escheat. For the purposeof accounting, the cards consist of an asset on the owner's books and apayable on the issuer's books. Under accounting principles, an issuermay write-off an aging card payable when the likelihood of the cardbeing used becomes “remote.” This practice is known as “derecognizing”the payable, and the corresponding bookkeeping entry usually results inincome to the issuer.³ The “remote use” standard used in accounting forderecognizing cards is similar to the “abandoned or unclaimed” standardused under escheat laws. The resultant interplay between the twostandards has substantial economic effect. If a “remote use” card isalso an “abandoned or unclaimed” card, an issuer may not be able toderecognize the payable. Instead, the issuer may be required to escheatthe card to an applicable state. ³As used herein, the phrase“derecognition” refers to the accounting practice of writing-off aliability or payable with the corresponding accounting entry resultingin income.

Determining which jurisdiction's unclaimed property laws may apply, andcorrectly applying that jurisdiction's laws after such determination, isa difficult task for issuers of cards. The escheat statutes vary fromstate to state, and country to country, on numerous relevant subjects.The priorities among competing jurisdictions are subject to rules, andthese rules themselves vary from state to state. These laws are notstatic but are amended over time. In addition, the application of thelaws is fact dependent and varies upon certain facts, including the typeof issuer, type of card, facts specific to a portfolio, facts regardingthe owners, and facts specific to a particular card. These facts are notstatic but change over time. Therefore, it would be beneficial toprovide a system, process, and method under which an issuer may processthe large numbers of applicable legal and factual escheat variables todetermine and manage the escheat of the cards in a portfolio andseamlessly adjust and manage escheat as the laws and facts change overtime.⁴ ⁴A rules-based systems processing platform would preferablydetermine, on any given date, if the cards are required to escheat. Forcards slated to escheat, the systems platform also would track,ascertain, and manage all pertinent escheat events and attributesregarding the cards, including, among others, determination of thejurisdiction of escheat, the presumed abandonment date, the duty toprovide a pre-escheat notice, the date for the pre-escheat notice, thedate for filing with the jurisdiction, the amount subject to escheat,the statute of limitation for card owner claims, the statute oflimitation for escheat jurisdiction claims, and the archiverequirements.

The legal and factual variables impacting the escheat status of a cardare highly specific to each individual item. For example, the escheatstatus of cards issued to end-users located in the same state may vary.Similarly, cards issued by issuers located in the same state may vary asto escheat. Even the cards sold in the same state may vary. Furthermore,changes that will impact the escheat status of the cards over time arenot uniform to a portfolio or to any particular state. Many changesimpacting escheat are specific to a single card. Therefore, it would bebeneficial to provide a system, process, and method under which theescheat status, attributes, and events regarding each individual card ina portfolio are processed, determined, and managed on a per-item basis(hereinafter “individually positioned”) and seamlessly processed, reset,and managed over time on a per-item basis as the laws and facts change(hereinafter “individually repositioned”).⁵ ⁵A rules-based systemsprocessing platform preferably would determine on a per card basis, onany given date, if cards are required to escheat. For cards slated toescheat, the systems platform preferably would track, ascertain, andmanage all pertinent escheat events and attributes on a per card basis.As the card ages, the systems platform would adjust the escheat statusand management for the card to optimize compliance on a per card basis.The systems platform preferably would track the escheat attributes ofthe card over time, ascertain applicable escheat events, and manage ordirect the management of the card upon the escheat events.

Some issuers elect to design solutions to manage the escheat of cards.Some design the payment instrument itself to minimize or maximize theamount required to escheat. Others reorganize their company structure tominimize or maximize breakage by trying to take advantage of the escheatlaws of the issuer's domiciliary state.⁶ While these types of solutionsmay benefit an issuer, they typically will use techniques based uponportfolio-wide averaging, coupled with efforts to achieve a desiredresult on average (i.e., hit the mean) or an outcome that will mostoften occur (i.e., hit the mode). The use of means or modes to addressthe interplay of multiple escheat laws with multiple factual scenariosis helpful, but it will not achieve an exact result for the portfolio orthe best result for the individual items residing on one side or theother of the targeted mean or mode. And, given the number of escheatvariables in question, an escheat solution may have unclear orunintended consequences unless the impact of a solution is determined ona per card basis. ⁶For example, an issuer may relocate to, orincorporate a subsidiary issuer company in, a jurisdiction that hasfavorable escheat laws, and issue the cards or instruments from thatstate. The Supreme Court has recognized that a company may select astate of incorporation by reference to which state's laws are moreattractive on the subject of escheat. See, Delaware v. New York, 507 US490, 507 (1993).

Furthermore, when a card program is designed, several non-escheatrelated features of the card program will impact the escheat of thecards in the program. Examples of such features are fees, expirationdates, capped loads, pre-activated card amounts, cash back, use ofopen-loop versus closed-loop systems, the scope of partially open-loopsystems, and the like. In addition, the design and selection of certaindistribution methods for the cards, such as Internet sales or thirdparty distribution channels, may impact the escheat profile of aportfolio. The current techniques used to assess the impact of featuresand methods upon escheat typically use techniques based upon portfolioaverages and targeted means and modes. The impact of features andmethods upon escheat can be more accurately assessed, however, if theimpact upon each card is determined on an individual basis. Therefore,it would be beneficial to provide a system, process, and method underwhich each card in a portfolio is individually positioned with itsescheat status, on any given date, to assess the impact of programdesigns, escheat solutions, program features, and distribution methodsupon the escheat of the cards within the portfolio.⁷ ⁷A rules-basedsystems processing platform preferably would determine, on any givedate, the exact escheat profile of a portfolio by reference to theindividual escheat status of each card in the portfolio. The settingsfor the platform preferably would be subject to adjustment to permit itsuse to perform “what-if” and other diagnostic runs to determine theescheat impact of various program designs, escheat solutions, programfeatures, or distribution methods.

If a card is not subject to escheat, the payable underlying the card maybe subject to derecognition by the issuer with attendant income orearnings. The derecognition of cards is subject to accounting standardsunder which the cards are derecognized when their likelihood of beingused becomes remote. Under current practices, an issuer typically willuse an accounting method that derecognizes card payables on aportfolio-wide basis as opposed to a per-item basis. The ability toderecognize payables on a per-item basis may be preferable, however, fora particular portfolio. In addition, when a portfolio-wide method isused, the issuer may desire to reconcile its portfolio-wide method withthe individual items in the portfolio. In addition, depending upon theaccounting method used to derecognize the payables, an issuer may desireto track, ascertain, and manage derecognition on a per-item basis, sothat each card is seamlessly derecognized over time pursuant to aspecified accounting method and supporting statistical methodology.Therefore, it would be beneficial to provide a system, process, andmethod under which each card in a portfolio is individually positionedwith respect to derecognition at the time a card is sold andindividually repositioned with such status on a seamless per-item basisover time and as the facts change.⁸ ⁸Various accounting methods areavailable for derecognizing card payables. Depending upon the method,the amount that may be derecognized, along with the timing ofderecognition, likely must be supported by a valid statistical model. Arules-based systems processing platform preferably would apply theaccounting method specified by the issuer for derecognition, use thetransaction data for the program to statistically support and apply theaccounting method, and direct and manage the derecognition of theportfolio on an individual card basis as each card ages.

To properly assess the economic impact of the cards positioned forescheat or derecognition, the number and balances of such items on anygiven date should be discounted to reflect the impact of redemptionsarising from use of the cards by end-users prior to future escheat orderecognition dates. At the time a card is sold, the escheat orderecognition of the card will be future events, and they will remainfuture events as the card ages until they occur. Therefore, to assessthe present economic impact, on any given date, of the future escheat orderecognition of cards, the balances of the cards slated for futureescheat or derecognition should be discounted to reflect the likelihoodthat they will be redeemed before escheat or derecognition occurs. Theadjusted balances of the cards after discounting for likely redemptions(hereinafter the “redemption discounted balances”) will provide theissuer, on any given date, with a more accurate economic view of theescheat and derecognition profile of a portfolio. Therefore, it would bebeneficial to provide a system, process, and method under which aportfolio, or any segment thereof, will be discounted to reflect theimpact of future redemptions upon the items positioned for escheat orderecognition and to provide the redemption discounted balances for theportfolio or any segment thereof.⁹ ⁹A rules-based systems processingplatform preferably would use the transaction data from the program tostatistically set redemption factors for the program and use the factorsto calculate the redemption discounted values for the portfolio. Theredemption discounted balances will provide valuable economicinformation to an issuer with respect to assessing future breakageincome, managing cash flows to meet escheat needs, and in managingrevenue generating opportunities concerning breakage.

Furthermore, redemption rates likely will vary among the types of cardscomprising a portfolio. Therefore, a determination of the redemptiondiscounted balance of a portfolio, or any segment thereof, will dependupon the nature of the individual cards comprising the portfolio orsegment. In turn, the redemption discounted balances of the individualcards within a portfolio or segment likely will depend upon individualcharacteristics that are specific to each individual card, such as itsage, its balance, its issuing sector, and the like. In addition, theseindividual characteristics for each card will not be static but likelywill change over time. For example, a card will have one redemption rateon the date it is sold but a completely different redemption rate fouryears later. Therefore, it would be beneficial to provide a system,process, and method under which each card within a portfolio isindividually positioned with its redemption discounted balance at thetime of sale and individually repositioned with its redemptiondiscounted balance on a seamless per-item basis as the card ages and asthe facts change over time.¹⁰ ¹⁰A rules-based systems processingplatform preferably would use the transaction data to set redemptionfactors and apply the factors to each card in a portfolio on anindividual pre card basis to set the redemption discounted balance ofthe card on a given date and to adjust the redemption discounted balanceof the card as its ages. This method and process enables the redemptiondiscounted balance to be efficiently determined for any segment of aportfolio by reference to the aggregated values of the cards in thesegment.

Furthermore, current methods used by an issuer to calculate theredemption rate and the concomitant breakage rate for a portfolio, orany segment thereof, typically require the issuer to conduct amathematical or statistical analysis of the portfolio or applicablesegment to determine its redemption and breakage rates. When a portfoliois administered in an operational setting, however, the portfoliotypically will be segmented into subsets for many purposes for analysisor operations. For example, the historical numbers for a portfoliotypically will be separated and presented by year, such as by cards soldin particular years. They also may be separated by geographic location,such as by state. They also may be segmented by distribution method,such as Internet versus brick-and-mortar. They typically will beseparated by combinations of the above along with other characteristicsor factors. In addition, the splitting of a portfolio by an issuer intosubsets for analysis or operations typically will reoccur over time. Forexample, the numbers for a portfolio may be separated into subsets andpresented in regular monthly, quarterly, or yearly statements orreports. Or the splitting of a portfolio into subsets may be requiredfor a special project as of a specified date.

The current practice of determining redemption and breakage rates byperforming a mathematical or statistical analysis of a portfolio, or aspecified segment thereof, is not practical for payment cards underthese circumstances. A system, however, that individually positions eachcard with its individual redemption rate, breakage rate, and redemptiondiscounted balance and then aggregates the individual rates and balancesfor specified subsets of a portfolio would enable the redemption rate,breakage rate and redemption discounted balance for any specified subsetof a portfolio to be determined and reported on an efficient basiswithout resort to multiple or repeated mathematical or statisticalanalyses. This “bottom-up” system would permit redemption and breakagerates, along with discounted redemption balances, to be reported formultiple specified subsets of cards within a portfolio as of any givendate.¹¹ For example, the breakage rate and redemption discounted balanceof the cards sold in 2003 could be determined as of any given date. Asanother example, the breakage rate and redemption discounted balances ofthe group of cards required to be escheated to Missouri in 2014 could bedetermined. Therefore, it would be beneficial to provide a system,process, and method under which the redemption rates and redemptiondiscounted balances of the cards in a portfolio are individuallydetermined and then aggregated by reference to specified segments of acard portfolio. ¹¹The process and method preferably would determine theredemption rate and breakage rate from the data for a portfolio as awhole, and then individually position each card with its specificredemption rate and breakage rate and adjust those rates for eachspecific card over time. When the redemption discounted balance isrequired for any subset or segment of a portfolio, the individual ratesfor the cards in the subset or segment are aggregated and reported. Thisbottom up approach is more efficient than the current practice ofstatistically or mathematically analyzing each subset of a portfolio. Italso provides a more statistically sound approach to setting breakagerates and redemption discounted balances of small segments or subsets ofa portfolio.

The determination and positioning of the escheat status, derecognitionstatus, redemption rate, breakage rate, and redemption discountedbalance for the individual cards in a portfolio will have a substantialeconomic impact upon the portfolio. As a result, these metrics should bedetermined on a real-time or near real-time basis at or about the timewhen the items are sold and should be individually repositioned on areal-time or near real-time basis over time at or about the time whenfacts and laws change. Therefore, it would be beneficial to provide asystem, process, and method under which the escheat status andderecognition status, along with the redemption discounted values, ofthe cards in a portfolio are individually positioned and individuallyrepositioned on a real-time or near real-time basis.¹² ¹²A rules-basedsystems processing platform preferably would aggregate and filterapplicable transaction data on a real-time or near real-time basisspecified by an issuer, and would set and reset the escheat andderecognition status and redemption adjusted balance of each card on anindividual basis as the card ages.

The current models for issuing payment instruments should be classifiedas “single footprint systems” because they are capable of using only oneissuer for each portfolio thereby confining the issuer and end-users tothe positives of a single issuer state's laws while also exposing theissuers and end-users to the negatives of that state's laws. Thislimitation could be managed if the cards in the portfolio are seamlesslyissued by multiple companies domiciled in multiple states (hereinafterthe “multiple footprint system”).¹³ A multiple footprint system wouldallow the flexible use of differing combinations of multiple companiesto issue cards within a single portfolio. Combinations would include aparent and subsidiary, multiple subsidiaries, one or more independentcompanies, and the like. Therefore, it would be beneficial to provide asystem, process, and method under which a multiple footprint system maybe used to issue the cards of a single portfolio. ¹³As one of many legalvariables affecting escheat, the unclaimed property laws of thedomiciliary state of the card issuer, in certain circumstances, maygovern and impact the escheat of the cards. Each card issuer will haveone domicile located in a single state. Therefore, the use of a singlefootprint system restricts the management of this legal variable to oneissuing state's laws. In a single footprint system, there will be onlyone issuing state, one domicile for that state, and, thus, only oneapplicable issuing state's laws. A multiple footprint system uses morethan one issuer to issue the cards of a portfolio. Therefore, aportfolio manager may take advantage of more than one set of issuingstates' unclaimed property laws.

Furthermore, an issuer may desire to retain one segment of a portfoliowhile selling or transferring another segment of the same portfolio toone or more other issuers. Transfers of a segment of a portfolio amongmultiple issuers are difficult, if not impossible, to implement in asingle footprint system because the cards cannot be readily repositionedfor issuance by multiple issuers. The splitting of a portfolio, however,among one or more issuers (hereinafter “split issuance”) will bepossible, however, in a multiple footprint system. Therefore, it wouldbe beneficial to provide a system, process, and method under which thecards in a portfolio will be processed and subject to split issuance bymultiple issuers in a multiple footprint system.

Furthermore, the multiple issuers in a split issuance system may desireto split the cards among the issuers based upon the escheat status orderecognition status of the cards in the portfolio, so that cards with aspecified status are issued by one issuer and the cards with anotherstatus are issued by the other issuer. The issuers may desire toimplement these splits at regular intervals or on designated timetablesas the cards and instruments are sold to buyers or age over time. Thismethod also would enable an issuer to classify the cards in a program byreference to the quality of their escheat status or derecognition statusso that an issuer may retain one or more classes of cards while sellingor transferring other classes of cards for issuance by another issuer.Therefore, it would be beneficial to provide a system, process, andmethod under which the cards in a portfolio will be classified on anindividual per card basis by reference to the escheat status orderecognition status of the cards and allocated by class among multipleissuers in a split issuance system at designated intervals or atspecified times.

Furthermore, when a multiple footprint system is used for a portfolio,each card in the portfolio must be placed in the correct footprint atthe correct time so that it is issued by the correct issuer of theproper footprint at the desired time. In addition, the class or statusof a card may change over time or upon changes in law or facts, and anissuer may desire to reposition a card among the footprints of themultiple footprint system to reflect the change. Therefore, it would bebeneficial to provide a system, process, and method under which theindividual positioning method is used to individually position andpopulate each individual card with the proper issuer and footprint of amultiple footprint system and to individually reposition each card amongthe multiple footprints and issuers on a seamless basis as the card agesor the laws and facts change over time.¹⁴ ¹⁴With respect to multiplefootprint systems, a rules-based systems processing platform preferablywould determine the status of each individual card and would allocateand populate the footprints of the multiple footprint system. In itsdiagnostic mode, the systems platform preferably would determine theimpact of various combinations of footprints upon the escheat andderecognition profiles of a portfolio. In its operation mode, itpreferably would triage the cards as sold and allocate and populate eachfootprint with a correct and optimized set of cards. In itsclassification mode, it preferably would classify the cards in aportfolio by specified escheat status or derecognition status and splitthe portfolio pursuant into the specified classes.

Furthermore, when a multiple footprint model is used, an issuer maydesire to individually position the cards into the footprints on areal-time or near real-time basis at specified times which may be thedates the cards are sold to buyers or other dates when the portfolio istransferred or split. Real-time or near real-time positioning inmultiple footprint systems assures that each issuer in each footprintwill be the holder of the card obligation from and after the specifiedtime. It also helps in managing escheat issues arising from delayedpositioning. Additionally, it assures that the cards specified for themultiple footprints are accurately and timely allocated among thefootprints. Therefore, it would be beneficial to provide a system,process, and method that individually positions cards among the multipleissuers of a multiple footprint system on a real-time or near real-timebasis when and as the products are sold to buyers or at other specifiedtimes.¹⁵ ¹⁵The systems platform preferably would manage the multiplefootprint system in real-time or near real-time at or about the timecards are sold or used, would reposition and reclassify the cards asthey age over time, and would reallocate and populate the footprints ofthe multiple footprint systems upon repositioning.

Furthermore, the approaches taken by issuers to escheat compliance arenot uniform but differ from issuer to issuer. The current methods usedby issuers to assess the risk of their decisions concerning escheatcompliance typically use estimates based upon portfolio averages, meansand modes. In addition, many issuers require their outside law firms oraccounting firms to provide opinion letters supporting the issuers'methods for handling the escheat and derecognition of cards. The currentmethods used to provide opinion letters typically use estimates basedupon portfolio averages, means and modes. An assessment of thecompliance related risks arising from an issuer's compliance decisionswill be made more efficient and accurate if a portfolio can segmentedinto subsets for the purpose of isolating the risk of a particulardecision on an exact or near-exact basis by individually positioning thecards with the subset by each card's escheat status. Similarly, theprocess of seeking and providing opinion letters would be made moreefficient and accurate. Therefore, it would be beneficial to provide asystem, process, and method under which the cards in a portfolio areindividually positioned by their escheat status into specified subsetsfor the purpose of risk assessment and opinion letters.

Furthermore, when a multiple footprint system is used, the cards in aportfolio will be issued by multiple issuers. The buyers or otherend-users of these cards may desire, from time to time, to ascertain theidentity of the issuer of a particular item. Therefore, it would bebeneficial to provide a system, process, and method under which a buyeror end-user may be able to ascertain the identity of the issuer of aparticular card owned by the buyer or end-user.

The escheat of cards will materially alter the usual course of conductof the issuer and end-user regarding the use of the items. Ordinarily,when an item is used by an end-user, the end-user will present the itemfor redemption to an entity such as a retailer. If properly presented,the card will be authorized for acceptance by the retailer and honoredby the issuer through a settlement payment process. Transactionprocessors electronically activate cards when sold, authorize cards foruse at retailers when presented for redemption, and settle the paymentby the issuer to the retailer after a card is redeemed. When the item isescheated, however, this orderly process will cease. The issuer will berequired to escheat the card to an applicable jurisdiction. At thattime, the issuer's obligation to honor the card will be released. Theability of an end-user to use the card will cease and will be declinedupon presentation, leaving the end-user to locate and reclaim the cardfrom the state of escheat.

The current system of reclaiming escheated cards is burdensome and isnot cost effective for low dollar value or anonymous cards. Therefore,it would be beneficial to provide an automated system, process, andmethod under which an issuer may seamlessly honor an escheated card uponpresentment by an end-user and seek reimbursement from the stateregarding the escheated item. In the alternative, it would be beneficialto provide an automated system, process, and method under which the datafor the escheated cards are managed for the jurisdictions for efficientprocessing of reclamation in a manner consistent with the currenttransaction processing systems used to process the cards prior toescheat.

When cards are escheated, the issuer is required to file a report withthe jurisdiction of escheat and likely will be required to transmitcertain information and data concerning the escheated cards to thejurisdiction of escheat. With respect to some filings, an issuer will berequired to provide specific data on the cards escheated to thejurisdiction. Other filings, however, will be made in the “aggregate”without supplying specific data for the escheated cards. When theinformation is escheated in the aggregate, the jurisdiction will nothave sufficient information to process a reclamation claim. Furthermore,for security purposes, certain issuers may desire not to transmit cardnumbers and other security sensitive information to the state uponescheat. Therefore, it would be beneficial to provide a system, process,and method under which information retained by the issuer upon escheat,including the information retained for security reasons and dataretained with respect to aggregated filings, may be accessed by thestate or card owner for the purpose of processing of a claim made by acard owner with the escheat jurisdiction for return of an escheatedcard.

As the cards are purchased and used by end-users, the resultant cardtransactions likely will be electronically processed by a transactionprocessor. The transaction processor may be the issuer but likely willbe a third party processor. The transaction processor's data likely willbe considered the “data of record” for a program or portfolio. Thistransaction data, along with other information from the issuers, will berequired to perform the various processes, systems and methods describedherein. In addition, it is desirable that the issuer's accounting booksregarding escheat and derecognition transactions tie to the transactionprocessor's data of record.¹⁶ Therefore, it would be beneficial toprovide a system, process, and method under which the transaction dataand other pertinent information is aggregated through one or moregateways from multiple sources, including issuers and transactionprocessors, for the performance of the processes and methods describedherein and for the purpose of enabling an issuer to tie its accountingbooks with the transaction processor's data of record with respect toescheat and derecognition related transactions. ¹⁶With respect toderecognition of cards, under current practices, the transactionprocessor's “data of record” cannot record the derecognition of a card,because the card must remain live on the processor's records in theevent it is used after derecognition. Similarly, if an issuer desires tohonor an escheated card when used after escheat, the escheated card mustremain live on the processor's data of record. It would be desirable toenable an issuer to reconcile and tie the transaction processors data ofrecord for a program with the issuer's books with respect to escheat andderecognition transactions.

Given the nature of the card programs and portfolios, the issuers likelywill sell and issue millions of small dollar items for use by millionsof customers throughout a wide variety of jurisdictions resulting in thecreation, maintenance, and processing of millions of small dollarpayables with varying escheat characteristics, derecognition attributes,breakage rates, and redemption discounted values, all of which maychange over time. The proper and timely processing of such large volumesof items, transactions, and variables would be benefited by an automatedprocess. Therefore, it would be beneficial to provide a system, process,and method under which the various processes, systems and methodsdescribed herein are implemented on an automated basis across multijurisdiction portfolios with large numbers of accounts.

SUMMARY OF THE INVENTION

The instant invention includes processes, methods, and systemsarchitecture for integrating the key requirements of the unclaimedproperty laws of the states and territories of the United States andother jurisdictions, along with certain generally accepted accountingprinciples, into a systems processing platform that may be used tooptimize compliance by an issuer of payment cards with the escheat lawsand accounting principles while either maximizing or minimizing thecards an issuer is required to escheat or is permitted to derecognize.Embodiments of the instant invention include all aspects of datacollection and reformatting, system hardware and software architecture,methods for processing legal rules, methods for processing theaccounting rules, methods for redemption discounting, data storagemethods, reporting methods, and operational processing methods requiredto fulfill the issuer's regulatory obligation to escheat the cards asrequired, to fulfill the issuer's ability to derecognize the cards inthe event they are not subject to escheat, and to manage all aspects ofthe escheat and derecognition processes.

The methods, processes, and systems architecture of the instantinvention specifically address the processing of the escheat orderecognition of payment instruments issued by the financial services,retail, and payment instrument industries, including payment instrumentswhich use magnetic stripes, bar codes, chips, or other electronic orcomputer methods to carry out payment obligations. Examples of suchpayment instruments are prepaid cards, stored value cards, gift cards,credit memo accounts or cards, loyalty or affinity points or cards,rebates, promotional cards, awards or incentive points or cards, healthsavings account cards, government benefit cards, payroll cards, per diemcards, prepaid minutes from wireline or wireless telephone companies,electronic coupons or certifications, mobile chip payment systems, andthe like.

A preferred embodiment of the instant invention uses a systemsprocessing platform that enables each card in a portfolio to be analyzedon an individual per card basis with respect to numerous factualvariables, legal variables, and issuer directives and individuallypositioned and managed on a per card basis for either the minimizationor maximization of the cards subject to escheat or available forderecognition. The systems processing platform uses an individualpositioning method under which cards are analyzed and individuallypositioned on an exact per-card basis versus a portfolio-wide averageand estimated basis, resulting in either the minimization ormaximization of the cards escheated or derecognized by the issuer. Theinstant invention enables portfolios to be managed on an exact per cardbasis, and enables a portfolio to be split into segments for issuance,operations, analysis, classification, risk assessment, legal oraccounting opinions, and the like. Preferred embodiments of the instantinvention uses a real-time or near-real time method enabling an issuerto analyze and manage escheat and derecognition on a real time basis inadvance of derecognition or escheat.

A preferred embodiment of the instant invention includes the “individualpositioning method” of using an automated process and system toindividually position and/or individually reposition each card in aportfolio on a real-time or near real-time basis to track, ascertain,and manage a regulatory or rules driven status for each individual cardor instrument on a per card basis. The individual positioning method maybe used to determine the status of each individual card with respect toregulations and rules governing payment cards. In a preferredembodiment, the individual positioning method is used to individuallyposition the escheat status, derecognition status, redemption rate,breakage rate and/or the redemption discounted value of each individualcard as of a specific date. In another embodiment, the individualpositioning method is used to individually position the status of eachcard with respect to compliance with consumer protection and other lawsregulating fees, expiration dates, cash back, reloads, and the like.Preferably, the individual repositioning method is used to automaticallyand seamlessly reset and manage the status of each card in eitherembodiment as a card ages and as laws or facts change over time.

A preferred embodiment of the instant invention includes the use of the“individual positioning method” for the specific purpose of processing,determining, and managing the escheat status of each card, along withpertinent escheat attributes and events regarding each card, on anautomated per card basis. In a preferred embodiment, a systems platformdetermines if a card is slated for future escheat to a particularjurisdiction. If a card is slated for future escheat, the systemsplatform tracks, ascertains, and manages various escheat attributes andevents regarding the card including, among others, the jurisdiction ofescheat, the presumed abandonment date, the duty to send a pre-escheatnotice, the date of a pre-escheat notice, the date of an escheat filingwith the jurisdiction, the escheat amount, the jurisdiction's escheatfiling fields, the jurisdiction's escheat data format, thejurisdiction's escheat filing media, the statute of limitations for cardowner claims, the statute of limitations for escheat jurisdictionclaims, and applicable archive requirements. The individual positioningmethod preferably is used to determine and manage the escheat status,events, and attributes for each individual card on a specific date. Theindividual repositioning method preferably is used to automatically andseamlessly reset, determine, and manage the escheat status and relatedattributes and events for each individual card as the card ages and aslaws or facts change over time.

A preferred embodiment of the instant invention includes the use of the“individual positioning method” for the specific purpose of processing,determining, and managing the derecognition of each card on an automatedper card basis. In a preferred embodiment, a systems platform determinesif a card is eligible for future derecognition. If a card is eligiblefor future derecognition, the systems platform tracks, ascertains, andmanages various derecognition attributes and events regarding the cardincluding, among others, the amount that is subject to derecognition,the timing of derecognition, and the reconciliation of the derecognitionmethod on a per card basis. The individual positioning method preferablyis used to determine and manage the derecognition status, events, andattributes for each individual card on a specific date. The individualrepositioning method preferably is used to automatically and seamlesslyreset, determine, and manage the derecognition status and relatedattributes and events for each individual card as the card ages and aslaws or facts change over time.

A preferred embodiment of the instant invention includes the “redemptiondiscounted balance method” of using an automated system to implement anindividual positioning process for the specific purpose of determiningthe redemption discounted balance of each card in a portfolio on a percard basis. In a preferred embodiment, this method is used to determinethe redemption discounted balance for each card slated for futureescheat and for each card eligible for future derecognition. Theindividual positioning method preferably is used to determine thediscounted redemption balance of each individual card on a specifieddate. The individual repositioning method preferably is used toautomatically and seamlessly recalculate the discounted redemptionbalance of each individual item as the card ages and as laws or factschange over time.

A preferred embodiment of the instant invention includes the “aggregatedindividual breakage rate method” of using an automated system toimplement an individual positioning process for the purpose ofdetermining the redemption rate and breakage rate of each card in aportfolio on a per card basis and aggregating these individual rates todetermine and report the redemption rate and breakage rate for anyspecified subset of a portfolio as of any specified date. In a preferredembodiment, the method is used to determine the redemption rate andbreakage rate for the cards slated for future escheat, the cardseligible for future derecognition, and any subset thereof. The methodpreferably uses individual positioning to determine and report theredemption rate and breakage rate for any subset of a portfolio on anyspecified date. The method preferably uses individual repositioning toautomatically and seamlessly determine and report the redemption rateand breakage rate for any subset of a portfolio as it ages and as lawsor facts change over time.

A preferred embodiment of the instant invention includes the use of“aggregated individual breakage rate method” for the specific purpose ofdetermining the redemption discounted balance of a segment or subset ofa portfolio. A systems platform uses the individual positioning methodto determine the redemption rate and breakage rate of each card in aportfolio on a per card basis and then aggregates the individual ratesto determine and report the redemption discounted balance of anyspecified subset of a portfolio as of any specified date. In thepreferred embodiment, this method is used to determine and report theredemption discounted balance of the cards slated for future escheat andthe cards eligible for future derecognition, along with any subset ofthe groups of cards. An example is the use of the method to determinethe redemption discounted value of all the cards in a portfolio that isslated for future escheat, and to further determine the redemptiondiscounted value of such cards on a per state and a per escheat datebasis, so that the redemption discounted balances of each group of cardsto be escheated to various states on various dates is determined andreported. The preferred method uses individual positioning to determineand aggregate the redemption discounted balance for any subset of aportfolio on any specified date. The method preferably uses individualrepositioning to automatically and seamlessly determine and report theredemption discounted balance of any subset of a portfolio as the subsetages and as laws or facts change over time.

A preferred embodiment of the instant invention includes the “multiplefootprint system method” for issuing cards under which the cards issuedin a card program are issued by two or more issuers, as opposed to beingissued in the current single footprint practice under which the cardssold or marketed in a card program are issued by one issuer. In apreferred embodiment, the multiple issuers in a multiple footprintsystem are domiciled in different states with the multiple footprintsystem permitting the issuer to take advantage of the escheat laws ofthe different states as appropriate. In another embodiment, the issuersare located in the same state with the multiple footprint systempermitting a card portfolio to be split among the issuers pursuant tospecified criteria. A preferred embodiment of the instant inventionincludes the use of a multiple footprint system to permit the issuanceof cards by any combination of multiple issuers, including multipleaffiliated companies or multiple unaffiliated companies (such as aparent and subsidiary, sister companies, multiple subsidiaries, multipleindependent companies, and the like).

A preferred embodiment of the instant invention includes the method ofcombining the “multiple footprint system method” with the “individualpositioning method” to permit a card portfolio to be processedeffectively within a multiple footprint system. A rules-based systemsprocessing platform processes the combined methods to split a portfolioon a specified date or timetable into segments or classes to be issuedby two or more issuers. In a preferred embodiment, the combined methodsare used to split a card portfolio into classes based upon the escheatstatus or derecognition status of the individual cards and to timelyallocate the classes among the multiple issuers. When a multiplefootprint system is used with individual positioning, the methodpreferably is used to automatically process, determine, and populateeach footprint of a multiple footprint system on a real-time ornear-real time basis on a specified date or timetable. When used withindividually repositioning, this method preferably is used toautomatically and seamlessly reset and reallocate the cards within themultiple footprint system over time and as the laws or facts change.

An embodiment of the instant invention comprises a multiple axisrules-based processing platform for determining and managing compliancewith the unclaimed property laws of applicable jurisdictions on anindividual card and automated basis in light of multiple legal andfactual variables and specified issuer decisions. A preferred systemsarchitecture platform periodically aggregates the required transactiondata, factual information, and issuer decisions through profiles,gateways, and networks with applicable issuers and transactionprocessors, and processes the legal variables, factual variables andissuer directives to determine and manage the escheat status of eachcard in a portfolio on an individual per card basis. One axis of apreferred embodiment of a systems platform processes applicable legalvariables including various priority rules governing the prioritiesamong jurisdictions (including the first, second and third prioritiesused in the United States), various versions of these priority rules,multiple key attributes of each jurisdiction's escheat laws, thehistorical versions of these rules and laws, and with the future changesto the laws that will occur over time. Another axis of a preferredembodiment of the systems platform processes the relevant factualvariables impacting escheat, including facts specific to card issuers,card programs, card owners, and cards, along with the changes to thesefacts that will occur over time. Another axis of a preferred embodimentof the systems platform processes specified decisions and directives bythe issuers regarding their preferences with respect to escheatcompliance.

The systems processing platform processes the legal variables, factualvariables and issuer directives to individually position each card in aportfolio with its escheat status on a specific date. Thereafter, thesystems platform automatically and seamlessly individually repositionseach card with its escheat status over time as the card ages and thelaws and facts change over time. In a preferred embodiment, at theelection of an issuer, the systems processing platform may be used on areal-time basis to set the escheat status on the same day as the cardsare sold and to reset the status upon applicable events on the same datethe event occurs. In a preferred embodiment, the systems processingplatform is used on a near real-time basis to set and reset the escheatstatus of each individual card within weekly, monthly or other desirablyaccounting periods.

A preferred embodiment of the instant invention also comprises amultiple axis rules-based processing platform for determining andmanaging compliance with applicable accounting principles and relatedstatistical methods governing the derecognition of card payables on anindividual item and automated basis in light of the accounting methodselected by an issuer for derecognizing the payables, the statisticalmethod used to support the accounting method, and specified issuerdecisions. A preferred systems architecture platform periodicallyaggregates the required transaction data, factual information, andissuer directives through profiles, gateways, and networks withapplicable issuers and transaction processors, and processes theapplicable factual variables, issuer directives, accounting methods, andstatistical methods to determine the cards that are eligible forderecognition and to manage the derecognition of each card in aportfolio on an individual card basis.

The preferred systems processing platform individually positions eachcard in a portfolio with its derecognition status on a specific date.Thereafter, the systems processing platform of a preferred embodimentautomatically and seamlessly individually repositions each card with itsderecognition status over time as the card ages and the laws and factschange. In a preferred embodiment, at the election of an issuer, thesystems processing platform may be used on a constant real-time basis toprocess and determine the derecognition status on the same day as thecards are sold or used. In a preferred embodiment, the systemsprocessing platform is used on a near real-time basis to periodicallyset or reset the derecognition status of each individual card withinweekly, monthly or other desired accounting periods.

When utilized in its diagnostic mode, the systems processing platform ofa preferred embodiment is capable of determining and diagnosing theescheat profile and derecognition profile of a portfolio as of aspecified date. The systems processing platform preferably determinesthe profile of a portfolio on an as-is basis as of the specified date.In addition, in a preferred embodiment, the settings on the systemsprocessing platform may be adjusted to modify factual variables andissuer directions to perform “what-if” or diagnostic runs to assess theimpact of program designs, escheat solutions, issuer directives, programfeatures, distribution methods, and with proposed changes to theforegoing upon the escheat and derecognition profiles of a portfolio.The systems processing platform may be used in its diagnostic mode ineither a single footprint system or a multiple footprint system. In apreferred embodiment, the systems platform measures the risk of certainissuer decisions or directives. In another preferred embodiment, thesystems platform recommends footprints in a multiple footprint systemalong with other attributes of the program to optimize the escheat orderecognition profiles of a portfolio.

When utilized in its operations mode, the multiple axis rules-basedprocessing platform of a preferred embodiment manages the escheatprocess for the cards in a portfolio. Based upon the legal variables,factual variables, and issuer's directives, the systems processingplatform determines the escheat status of each card and adjust thestatus of each card as it ages and as facts and laws change over time.The systems processing platform preferably determines if the card isslated for future escheat. With respect to cards slated for futureescheat, the systems processing platform of a preferred embodiment alsotracks, ascertains and manages various attributes and events regardingthe escheat of a card. In a preferred embodiment, the escheat events andattributes processed by the systems platform includes, among others, thejurisdiction of escheat, the presumed abandonment date, the duty to senda pre-escheat notice, the pre-escheat notice dates, the date of escheatfiling with the jurisdiction, the escheat amount, the jurisdiction'sescheat filing fields, the jurisdiction's escheat data format, thejurisdiction's filing media, the statute of limitations for card ownerclaims, the statute of limitations for escheat jurisdiction claims, andapplicable archive requirements.

When utilized in its operations mode, the multiple axis rules-basedprocessing platform of a preferred embodiment manages the derecognitionprocess for the cards in a portfolio. Based upon the specifiedaccounting method, specified statistics method, certain factualvariables, and issuer's directives, the systems processing platformdetermines the derecognition status of each card and adjust the statusof each card as it ages and as facts and laws change over time. Thesystems processing platform determines if the card is eligible forderecognition. With respect to cards that are eligible for futurederecognition, the systems processing platform of a preferred embodimenttracks, ascertains and manages various attributes and events regardingthe derecognition of a card. In a preferred embodiment, thederecognition attributes and events processed by the systems platforminclude, among others, the amount that is subject to derecognition, thetiming of derecognition, and the reconciliation of the derecognitionmethod on a per card basis.

The systems processing platform of a preferred embodiment is used toprocess the cards of a portfolio issued in a single footprint system. Ina preferred embodiment for a single footprint system, the systemsplatform processes the cards and individually positions the cards withinthe single footprint system with their individual escheat status,derecognition status, redemption rate, breakage rate, and redemptiondiscounted balance. The systems platform preferably sets the status ofeach card with respect to these metrics as of the date sold andautomatically adjusts the status of each card with respect to thesemetrics as a card ages and as facts and laws change over time. Withrespect to escheat, the systems platform of a preferred embodimentdetermines whether the card is slated for future escheat. If so, thesystems processing platform preferably tracks, ascertains and managesvarious escheat events and attributes regarding the card as the cardages or facts and laws change over time. With respect to derecognition,the systems platform of a preferred embodiment determines if the card iseligible for derecognition. If so, the systems processing platformpreferably tracks, ascertains and manages various events and attributesregarding the derecognition of the card as the card ages or facts andlaws change over time. With respect to rates and balances, the systemsplatform of a preferred embodiment determines and reports the redemptionrate, breakage rate, and redemption discounted balance for any segmentor subset of the portfolio as of any specified date, and adjusts therates and balance as the segment or subset ages, or as facts and lawschange over time.

The systems processing platform of a preferred embodiment is used toprocess the cards of a portfolio issued in a multiple footprint system.In a preferred embodiment for a multiple footprint system, the systemsprocessing platform assigns issuers to the multiple footprints, asneeded or desired, allowing financial institutions, retailers, issuers,portfolio managers and portfolio designers to optimize escheatcompliance and derecognition opportunities while taking advantage of theescheat laws of the jurisdiction where the footprint entities arelocated. After the footprints of a multiple footprint system aredetermined and assigned, then systems processing platform of a preferredembodiment individually positions and populates each card in the properfootprint of the system at the proper time specified for the portfolio,so that each card is placed with and issued by the proper issuing entityin the proper footprint as of the specified time. In a preferredembodiment, the systems platform optimizes the use of the multiplefootprints by automatically selecting and individually positioning andpopulating each card with the footprint that best optimizes the escheatand derecognition of the card, consistent with the issuer's directives.

With respect to each footprint of a multiple footprint system, after thecards are positioned and populated in a specific footprint, the systemsprocessing platform of a preferred embodiment is used to process thecards issued in the footprint. In a preferred embodiment, the systemsprocessing platform processes the cards and individually positions thecards within each footprint of the multiple footprint system with theirindividual escheat status, derecognition status, redemption rate,breakage rate, and redemption discounted balance. The systems platformpreferably sets the status of each card with respect to these metrics asof the date sold and automatically adjust the status of each card withrespect to these metrics as a card ages and facts and laws change overtime. With respect to escheat, the systems platform of a preferredembodiment determines whether the card is slated for future escheat. Ifso, the systems platform preferably tracks, ascertains and managesvarious escheat events and attributes for the card as the card ages orfacts and laws change over time. With respect to derecognition, thesystems platform of a preferred embodiment determines if the card iseligible for derecognition. If so, the systems processing platformpreferably tracks, ascertains and manages various derecognition eventsand attributes for the card as the card ages or facts and laws changeover time. With respect to rates and balances, the systems platform of apreferred embodiment determines and reports the redemption rate,breakage rate, and redemption discounted balance for any segment orsubset of the portfolio as of any specified date, and adjusts theserates and balance as the segment or subset ages or facts and laws changeover time.

Preferred embodiments of the systems of the instant invention arecapable of “triaging” cards on an individual per card basis to determinein real-time or near real-time, based upon the multiple evaluatedvariables, whether and how the escheat and derecognition of a card canbe minimized or maximized. In a preferred embodiment, depending uponsettings to meet an issuer's directives, the instant invention positionseach card within a multiple footprint system to separate the cards thatare slated for future escheat from the cards that are eligible forderecognition. Furthermore, with respect to cards positioned forescheat, a preferred embodiment of the instant invention furtherpositions the cards to take advantage of the most favorable escheatrules among a group of escheat jurisdictions and within a specificescheat jurisdiction. With respect to items slated for future escheat, apreferred embodiment of the instant invention also determines andreports if and when amounts slated for escheat may be subjected torevenue generating events such as generation of float, the retention ofdiscounts or reductions allowed by a jurisdiction, and the like. Withrespect to the items that are eligible for derecognition, a preferredembodiment of the instant invention determines and reports if and whenthe items may be subject to revenue generating events such as thegeneration of float, taking of fees, and derecognition of liabilitieswith resultant income or earnings. Because the system of the preferredembodiment of instant invention continuously evaluates changes to thevariables, an issuer may implement risk assessed compliance on revenuegenerating events as individual cards meet required or designatedcriteria.

After a card has been initially positioned, the systems processingplatform of a preferred embodiment of the instant invention continuouslyevaluates any changes in the applicable variables concerning the card,and repositions the escheat status or derecognition status of each cardon an individual basis in light of the changes. In a preferredembodiment, if the reevaluation system determines that the escheatstatus or derecognition status of an item has changed within afootprint, the system repositions the item within the footprint toreflect the change (hereinafter “vertical repositioning”). For example,if a card slated for escheat is partially used by the card owner, thecard is vertically repositioned within its footprint to extend theprojected presumed abandonment date and the deadline for the escheatjurisdiction to reflect the fact that the card was partially used.¹⁷ Inthe preferred embodiment, if the reevaluation system determines that achange in the variables for a card makes issuance of the card by adifferent issuing entity within a multiple footprint system moreappropriate or beneficial, the system repositions the card and transferits issuer obligation to the more correct or desirable footprint issuerto reflect the change (herein “horizontal repositioning”). For example,if a purchaser of a registered card lived in one state at the time ofpurchase but later moved and changed the registered address to anotherstate, the system evaluates whether positioning the card in a differentfootprint of a multiple footprint system is required or would be morefavorable for the issuer, and then horizontally repositions the card asrequired with a different footprint issuer in the multiple footprintsystem.¹⁸ ¹⁷The systems processing platform uses vertical repositioningto reposition the escheat status of a card within a single footprint. Assuch vertical repositioning applies to the sole footprint in a singlefootprint systems and any one of the footprints in a multiple footprintsystem.¹⁸The systems processing platform uses horizontal repositioningto reposition the escheat status of a card among different footprints ofa multiple footprint system. A horizontally repositioned card is movedfrom one footprint to another footprint in the multiple footprintsystem.

A preferred embodiment of the instant invention also enables the issuerto separate the cards into classes based upon specified criteria. In apreferred embodiment, the cards are classified on a per card basis bytheir escheat or derecognition status. For example, the cards that arenot slated for escheat and are eligible for derecognition are placed inone class (hereinafter the “Class A Cards”), and the cards slated forfuture escheat are placed in a second class (hereinafter the “Class BCards”). It will be appreciated that the composition of and number ofclasses may vary depending upon the specified criteria. A preferredembodiment of the instant invention enables the issuer to set parametersthat establish the specific distinction between the Class A Cards andthe Class B Cards. A preferred embodiment of the instant invention alsopermits the issuer to create other classes of paper based upon theparameter settings. This system enables issuers to manufacture, manageor sell various classes of cards, and enables portfolio purchasers tobuy and manage classes of cards. In a preferred embodiment, the systemsprocessing platform classifies the cards on an automated basis pursuantto specified parameters regarding the escheat or derecognition status ofthe cards, and the systems platform allocates these classes of cardsamong multiple issuers or among buyers and sellers on an automated basisat specified times.

In a preferred embodiment, each card is subject to time-sensitivemilestones. With respect to cards slated for future escheat, examplesinclude the presumed abandonment date, the dates for pre-escheatnotices, the deadline for reporting cards to the applicablejurisdictions, the required time period for archive of records, thestatutes of limitation on card owners' claims, the statutes oflimitation on claims by jurisdictions seeking escheat, and the like. Thecards eligible for derecognition preferably are also subject to severaltime-sensitive milestones. Examples include the deadline for negativeescheat reporting if required, the required time period for archive ofrecords, the timing for derecognition of cards, the timing for“true-ups” of derecognized cards if required, the statutes of limitationon card owners' claims, the statutes of limitation on claims byjurisdictions contesting derecognition and seeking escheat, and thelike. The systems processing platform of a preferred embodiment of theinstant invention manages timelines on an automated and individual cardbasis by reference to the laws and facts that apply to each card, andindividually positions each card with deadlines on an automated per cardbasis, thereby allowing an issuer to meet its obligations and assess itsportfolio exposure in an efficient manner.

When a multiple footprint system is used to issue the cards sold in acard program, the owner of a particular card may desire to ascertain theidentity of the issuer of the card. The systems processing platform of apreferred embodiment of the instant invention provides a system thatenables card owners to identify the issuers of cards sold and issued ina multiple footprint system. In the preferred embodiment, the systemsplatform individually positions each card with a correct issuer andfootprint within the multiple footprint system at the time the card issold to a buyer. The systems platform also creates a record identifyingthe issuer and drops/stores the record into one or more files of adatabase that is available for web or telephone access by a card ownerpursuant to a prompt specified on the card. The systems platform of apreferred embodiment updates the record upon the initial positioning ofthe card and upon each repositioning.

When cards are escheated to a jurisdiction, the obligation of the issuerto honor the cards likely will be released, and the card owner may notbe able to use the card in its usual and intended manner. To avoid thisadverse result to card owners, the systems processing platform of apreferred embodiment of the instant invention provides a system underwhich card owners are enabled to use an escheated card on a continuedand seamless basis after escheat in its usual manner as if it were notsubject to escheat. In a preferred embodiment, the card owner ispermitted to use the card after escheat in the same manner permittedprior to escheat. The systems processing platform tracks each cardescheated to a state, filters the transaction data to recognize the useof an escheated card, bridges the processing system to permit the cardto be properly settled, and seeks reimbursement from the jurisdiction ofescheat by either transmitting a proper record and reimbursement form orby processing a proper set-off at the next applicable state escheatfiling. In another embodiment, the card owner is required to reclaim thecard from the state, but the systems processing platform processes thereclamation in an efficient manner as an intermediary between the cardowner and state. The card owner is issued a new card by the issuer, andthe systems processing platform reconciles the payment and seeksreimbursement from the state by transmitting a proper record andreimbursement form or by processing a proper set-off for the redemptionat the next applicable state escheat filing.

When cards are escheated, the issuer may be required or permitted toreport the cards in the aggregate to a jurisdiction, so that specificdata and information for the escheated cards are retained by the issuerand are not transferred to the jurisdiction. In addition, for securityreasons, an issuer may desire not to transmit card numbers and othersecurity sensitive information to a jurisdiction upon escheat. As aresult, an issuer will retain information about escheated cards that maybe needed by a card owner or jurisdiction to process an owner's claimfor the return of an escheated card. To address this subject, thesystems processing platform of a preferred embodiment of the instantinvention provides a system under which the jurisdiction is enabled toaccess the required data retained by the issuer for the purpose ofprocessing a card owner's claim for return of an escheated card. Inpreferred embodiment, a gateway with the jurisdiction permits limitedand secured access by or through the jurisdiction to the data requiredto process the card owner's claim.

The multiple axis rules-based systems processing platform of a preferredembodiment performs the above-described processes on an automated basisallowing the issuer to manage thousands or millions of cards in anefficient manner. In a preferred embodiment, the systems processingplatform aggregates transaction data on a constant real-time basis or onperiodic near-real time basis from the transaction processors for a cardprogram, along with information from the issuers, and extracts,translates and loads the data and information required by the systemsprocessing platform to perform the processes and systems describedherein along with other functions now known or hereinafter developed. Inthis preferred embodiment, the aggregation of data from the transactionprocessors also permits an issuer to reconcile and tie the issuer'saccounting books and records with the transaction processor's data ofrecord with respect to escheat and derecognition transactions.

The foregoing and other objects are intended to be illustrative of theinvention and are not meant in a limiting sense. Many possibleembodiments of the invention may be made and will be readily evidentupon a study of the following specification and accompanying drawingscomprising a part thereof. Various features and subcombinations ofinvention may be employed without reference to other features andsubcombinations. Other objects and advantages of this invention willbecome apparent from the following description taken in connection withthe accompanying drawings, wherein is set forth, by way of illustrationand example, an embodiment of this invention.

BRIEF DESCRIPTION OF THE DRAWINGS

One or more preferred embodiments of the invention, illustrative of thebest mode in which the applicant has contemplated applying theprinciples, are set forth in the following description and is shown inthe drawings and is particularly and distinctly pointed out and setforth in the appended claims.

FIG. 1 is an illustration showing the position of cards in a singlefootprint system in which the cards are issued by a single issuer tomultiple card owners or end-users.

FIG. 2 is an illustration showing the position of cards in a multiplefootprint system of the instant invention in which the cards are issuedby multiple issuers to multiple card owners or end-users. FIG. 2specifically illustrates the configuration of a multiple footprintsystem embodiment using two footprints in which one issuer is a parentcompany and a second issuer is a subsidiary of the parent company. FIG.2 also specifically illustrates the configuration of a multiplefootprint system embodiment using two footprints in which one issuer isa subsidiary of parent company and the second issuer is anothersubsidiary of the same parent company.

FIG. 3 is an illustration showing the position of cards in a multiplefootprint system embodiment in which the cards are split for issuance bymultiple issuers to multiple card owners and end-users. FIG. 3specifically illustrates the configuration of a multiple footprintsystem embodiment using two footprints in which some cards are issued byone company and the other cards are issued by an independent andunaffiliated company.

FIG. 4 is an illustration showing the individual positioning of cardswithin in a single footprint of a single footprint system embodiment ofthe instant invention. FIG. 4 specifically illustrates a configurationof an embodiment of the invention in which the cards are individuallypositioned and separated by their escheat status within the singlefootprint into one group of cards that is slated for future escheat anda second group that is eligible for derecognition.

FIG. 5 is an illustration showing the individual positioning of cardswithin a multiple footprint system embodiment of the instant invention.FIG. 5 specifically illustrates a configuration of an embodiment inwhich the cards are individually positioned between two footprints bytheir escheat status with the cards slated for future escheat beingissued by one company in the first footprint and the cards eligible forderecognition being issued by the other company in a second footprint ofa multiple footprint system.

FIG. 6 is an illustration showing the vertical repositioning of cardswithin a single footprint system embodiment of the invention. FIG. 6specifically illustrates the use of vertical repositioning to repositionthe presumed abandonment date and escheat filing deadline for a cardthat was slated for future escheat when issued and was partially used bythe card owner after issuance.

FIG. 7 is an illustration showing horizontal repositioning of a cardwithin a multiple footprint system embodiment of the invention. FIG. 7specifically shows the repositioning of a card from one footprint toanother footprint based upon a change in the card's escheat status frombeing a card slated for future escheat to being a card not slated forfuture escheat.

FIG. 8 is a schematic diagram of a system configuration of a preferredembodiment of the instant invention under which a multiple axisrules-based systems processing platform processes and manages theescheat and derecognition of the cards in the issuer's portfolio on anautomated basis employing individual card positioning and individualcard repositioning with the capability of using multiple footprintsystems and split portfolio analysis.

FIG. 9 is a schematic diagram of a system configuration of anotherpreferred embodiment of the instant invention in which the systemsprocessing platform is used to process the split issuance of the cardsin a portfolio or program among two unaffiliated issuers for splitissuance within a multiple footprint system. FIG. 9 specifically showsthe configuration of the use of the instant invention for split issuancewhere the systems architecture is used by the first issuer to classifythe cards, retain one class of cards, and transfer the other class ofcards to the second issuer, and the systems architecture is also used bythe second issuer to further classify the cards received from firstissuer.

FIG. 10 is a schematic diagram of a system configuration of a preferredembodiment of the Escheat Service/Platform component of the instantinvention shown in FIG. 8 through which the escheat status, theconcomitant derecognition status, and the escheat events and attributesof the cards are processed and managed on an automated and individualper card basis.

FIG. 11 shows an example of decision flow of an embodiment of theEscheat Service/Platform component of the instant invention shown inFIG. 10 which triages a card to determine if its revenue generatingstatus can be maximized by individually positioning a card slated not toescheat with a footprint in a multiple footprint system that uses anissuer domiciled in a non-escheat state.

FIG. 12 shows an example of decision flow of an embodiment of theEscheat Service/Platform component of the instant invention shown inFIG. 10 which triages a card to determine if its revenue generatingstatus can be maximized by individually positioning a card slated toescheat with the optimum escheat footprint in a multiple footprintsystem.

FIG. 13 shows another example of decision flow of an embodiment of theEscheat Service/Platform component of the instant invention shown inFIG. 10 which triages a card to determine if its revenue generatingstatus can be maximized by individually positioning a card slated toescheat with an optimum escheat footprint in a multiple footprintsystem.

FIG. 14 is a schematic diagram of a system configuration of a preferredembodiment of the Forecasting Service/Platform components of the instantinvention shown in FIG. 8.

FIG. 15 is a schematic diagram of a system configuration of anembodiment of the Escheat Service/Platform and the ForecastingService/Platform components of the instant invention shown in FIG. 8when used to individually position the redemption rate, breakage rate,and redemption discounted value of each card in a portfolio.

FIG. 16 is a schematic diagram of a system configuration of anembodiment of the instant invention used to process the system for cardowners to identify and look-up the issuer of a particular card in aprogram.

FIG. 17 is a schematic diagram of a system configuration of anembodiment of the instant invention in which an issuer processesinternally the products and/or services that the issuer offers and thatare potentially subject to escheat.

FIG. 18 is a schematic diagram of a system configuration of anembodiment of the instant invention in which an issuer utilizes a thirdparty processor for external processing of at least some of the productsand/or services that the issuer offers and that are potentially subjectto escheat.

FIGS. 19 a through 19 c show exemplary screen shots of an Issuer Profileof the embodiment of the instant invention shown in FIG. 8.

FIGS. 20 a through 20 d show exemplary screen shots of State LawProfiles of a state law table of the embodiment of the instant inventionshown in FIG. 8. FIG. 20 a shows general legal attributes for a stateprofile within the state law table. FIG. 20 b shows retailer-specificinformation for a state profile within a state law table. FIG. 20 cshows legal attributes regarding pre-escheat notices for a state profilewithin a state law table. FIG. 20 d shows legal attributers regardingstate escheat filings for a state profile within a state laws table.

FIG. 21 is an exemplary output file from the Escheat Service/Platformcomponent the embodiment of the instant invention shown in FIG. 8.

FIG. 22 shows a sample output from the Forecast Service/Platformcomponent of the embodiment of the instant invention shown in FIG. 8.

FIGS. 23 through 29 show examples of various reports that may begenerated by the Reports Platform component of the instant inventionshown in FIG. 8.

DETAILED DESCRIPTION OF A PREFERRED EMBODIMENT

As required, a detailed embodiment of the present invention is disclosedherein; however, it is to be understood that the disclosed embodiment(s)are merely exemplary of the principles of the invention, which may beembodied in various forms. Therefore, specific structural and functionaldetails disclosed herein are not to be interpreted as limiting, butmerely as a basis for the claims and as a representative basis forteaching one skilled in the art to variously employ the presentinvention in virtually any appropriately detailed structure. Forexample, the detailed embodiments disclosed and discussed below areparticularly well-suited for, and therefore discussed in connectionwith, products such as cards. Nevertheless, it will be appreciated thatvarious other products or services may be utilized in connection withthe same or similar embodiments of the invention without departing fromthe spirit or scope of the instant invention.

Referring to FIGS. 1 through 3, illustrations of configurations of asingle footprint system and several multiple footprint systems areshown. The issuers and designers of card programs currently use a singlefootprint system to issue the cards sold in a program. FIG. 1 shows theconfiguration of a single footprint system. In a single footprint systemonly one issuer is used to issue the cards in the card program/portfolioto the card owners and end users. The embodiment of the instantinvention described herein in detail employs a new technique of using amultiple footprint system method to issue (position) and/or repositionthe cards in a card program. In a multiple footprint system, the cardsin a program are issued by (positioned) and/or repositioned into two ormore issuers. Any combination of companies/entities can be used, such asa parent and subsidiary, two subsidiaries, or two unaffiliated entities.

FIG. 2 shows the configuration of an embodiment of a multiple footprintsystem using a parent and a single subsidiary to issue/reposition thecards into a single portfolio. FIG. 2 also shows the configuration of amultiple footprint system using two sister subsidiaries toissue/reposition the cards into a single portfolio. FIG. 2 showsembodiments in which two issuers are used in the multiple footprintsystem. Nevertheless it will be appreciated that three or more issuersmay be utilized in the same or similar manner without departing from thespirit and scope of the instant invention. As is shown in FIG. 2, theparent company creates one or two subsidiary entities, depending uponwhether the parent company itself desires to be one of the two issuers,or if the parent company wishes to have both issuers be subsidiarycompanies. It will be appreciated that the decision as to whether aparent company itself is an issuer will depend on a variety of factors,including, but not necessarily limited to the jurisdiction in which theparent company resides. If the parent company is acting as one of theissuers, the parent company itself issues cards in the portfolio tocertain specified end-users (as determined through the systems andmethod of the instant invention) as part of a first footprint, while thesingle subsidiary issues cards in the portfolio to other specifiedend-users as part of a second footprint. If the parent company is notacting as one of the issuers, a first subsidiary issues cards in theportfolio to certain specified end-users as part of a first footprint,while the second subsidiary issues cards in the portfolio to otherspecified end-users as part of a second footprint.

FIG. 3 shows the configuration of another embodiment of a multiplesystem using two independent and unaffiliated companies toissue/reposition the cards for a single portfolio. FIG. 3 shows anembodiment in which two issuers are used in the multiple footprintsystem. Nevertheless it will be appreciated that three or more issuersmay be utilized in the same or similar manner without departing from thespirit and scope of the instant invention. As is shown in FIG. 3, afirst entity issues cards in the portfolio to certain specifiedend-users (as determined through the systems and method of the instantinvention) as part of a first footprint or Sub-Portfolio, while thesecond, independent entity issues cards in the portfolio to otherspecified end-users as part of a second footprint or Sub-Portfolio. Inone preferred embodiment, Issuer #1 shown in FIG. 3 is retailer or otherentity for which the Total Card Portfolio has been designed to benefit(i.e. the store in which the cards in the Total Card Portfolio may beused), while Issuer #2 is an independent third party that contracts withthe retailer to act as an issuer for certain cards. Nevertheless, itwill be appreciated that both Issuer #1 and Issuer #2 could beindependent third parties that have contracted with the retailer to actas issuers for certain cards within the portfolio. Referring to theembodiment shown in FIG. 3, Issuer #1 issues cards that have beenclassified as Class A Cards by the systems and methods of the instantinvention; such cards are not slated for escheat and are eligible forderecognition when issued by Issuer #1. Cards that are slated forescheat if issued by Issuer #1 are classified as Class B Cards and areissued by Issuer #2. As is discussed further below, this allows theretailer to take advantage of more than one state's escheat laws.

In a preferred embodiment, a multiple footprint system and method isused to issue the cards in a card program to enable the issuers and/orthe retailer for which a card program has been designed to takeadvantage of more than one issuing state's escheat laws. Under thesecond priority rule governing escheat, an issuer is required to escheatcards to the domiciliary state of the card issuer. However, under thethird priority rule governing escheat, the issuer is required to escheatcards to the state where the cards were sold in the event that thedomiciliary state of the card issuer is a non-escheat state.¹⁹ In asingle footprint system, there is only one issuer of the cards and onlyone domiciliary state for that issuer. Therefore, when the secondpriority is applied, the single footprint system restricts the issuer toone state's laws. If the domiciliary state is an escheat state, theissuer will be required to escheat the cards to the state, leaving nocards available for derecognition. If the domiciliary state is anon-escheat state, the issuer will be required to escheat the thirdpriority cards to the escheat states where the cards were sold, makingthose cards unavailable for derecognition. ¹⁹In the United States,conflicts between the states seeking escheat of intangible property inmultiple jurisdiction settings are governed by certain priority rules.Three priority rules are commonly referenced, and are commonly known asthe “first priority rule” the “second priority rule” and the “thirdpriority rule.” The first priority rule gives the first position to theresident state of the card owner in certain circumstances. The secondpriority rule gives the second position to the domiciliary state of thecard issuer under certain circumstances. The third priority rules givethe third position to the domiciliary where the card was sold undercertain circumstances.

In a multiple footprint system of the instant invention, however,several issuers may be used to issue the cards, and each issuer willhave its own domiciliary state. As a result, where appropriate, theissuers are able take advantage of laws of multiple states in managingthe second priority rule and third the priority rule. For example, thecards sold in the non-escheat states (along with the escheat-exemptcards sold in some escheat states) are issued from one footprint of amultiple footprint system by an issuer domiciled in non-escheat state.These cards will not be slated future escheat under either the secondpriority rule or the third priority rule. The cards sold in the escheatstates (along with the non-exempt cards sold in some non-escheat states)are issued in a second footprint of a multiple footprint by an issuerdomiciled in an escheat state with favorable laws permitting discounts,reductions, and the like. These cards will be slated for future escheatbut the use of the second footprint permits the second issuer to takeadvantage of its domiciliary escheat laws instead of applying the thirdpriority rule.

By using a multiple footprint system to manage the escheat profile of aportfolio, issuers optimize revenue generating events related to thebreakage in a portfolio. The breakage on the cards eligible forderecognition may be turned into income or earnings if and when thecards properly are derecognized by the issuers. In addition, the use ofa multiple footprint system allows the issuers to manage the timeperiods for escheat and thereby lengthen the time giving rise toincreased float or cash flows. For example, in one embodiment an issuerdomiciled in an escheat state with a long abandonment period is used toissue the cards for the escheat segment of a portfolio to increase thetime when funds are held or available for use before escheat.²⁰Furthermore, the use of revenue models that charge back-end fees againstthe balance of the card after it is issued will be enhanced. Forexample, an issuer domiciled in a domiciliary escheat with a longpresumed abandonment is used in one embodiment to issue the cards for asegment of a portfolio to increase the time period during which fees maybe taken before escheat.²¹ In addition, the use of revenue models thatutilize expiration date to take the breakage as income, where permitted,may be enhanced by the use of a multiple footprint system or theinvention. ²⁰The unclaimed property laws of the states deem intangibleproperty to be abandoned for the purpose of escheat after a statedperiod of time. These time periods differ from state to state rangingprimarily from two to five years.²¹The use of back-end fees is permittedfor certain programs. These fees usually are charged each month againstthe balance of the card, such as a $2.00 monthly fee commencing twelvemonths after the last use of the card. The escheat of a card will stopthe process of taking fees over time. Therefore, a longer escheat periodpermits more fees to be charged.

By using a multiple footprint system to manage the escheat profile of aportfolio, the issuers also are able to manage the redemption risk in aportfolio. In a program without expiration dates, the issuers arerequired to honor the cards for extended, if not indefinite, periods oftime.²² As a result, the issuer is subject to extended risk that cardsmay be redeemed. Escheat may be used to manage that risk. The escheat ofcards in some states results in a release of the card issuer'sobligation to a card owner. With respect to such cards, an issuer mayuse escheat to cut-off ongoing redemption risk. The use of a multiplefootprint system enhances the issuer's ability to use escheat to manageredemption risk in that the issuer positions the escheat segment of aportfolio in a footprint that is favorable to redemption risk. Inaddition, the use of expiration dates to manage redemption risk, wherepermitted, may be enhanced by a multiple footprint system. ²²Theconsumer statutes of some states ban the use of expiration dates forcertain types of cards. These statutes create redemption risk in thatthe issuer is not permitted to use an expiration date to cut-off itsliability on the cards.

Referring to FIG. 4 and FIG. 5, illustrations of the use of theindividual card positioning method and system of several embodiments ofthe instant invention are shown. Current systems for analyzing theescheat profile of a portfolio typically use averages and estimates indetermining program designs and escheat solutions. The shown embodimentsof the instant invention employ an individual card positioning methodand system under which the cards are individually positioned on a percard basis with their respective escheat status. FIG. 4 shows aconfiguration of an embodiment of the invention for use of theindividual card positioning method to separate the cards within a singlefootprint system into the group of cards slated for future escheat andthe group of cards eligible for future derecognition. As is shown inFIG. 4, cards are sold and issued by a single issuer for varying amountsto various end-users. The system of an embodiment of the instantinvention, utilizes a rules-based platform (service, engine, program,subroutine, or other suitable function) to determine whether each cardis to be positioned as an escheat card slated for possible escheat or asa non-escheat card slated for possible derecognition. Cards slated forpossible escheat are tagged (e.g. logged in a data file containinformation regarding each card within a portfolio) as being subject toescheat, while cards slated for possible derecognition are tagged asnon-escheat.

FIG. 5 shows a configuration of another embodiment of the invention forthe use of the individual card positioning method to separate the cardsslated for future escheat from the cards eligible for futurederecognition in a multiple footprint system, under which the cardsslated for future escheat are issued by one issuer in one footprint andthe other cards issued by the another issuer in a second footprint in amultiple footprint system. As is shown in FIG. 5, cards are sold andissued by two different issuers for varying amounts to variousend-users. The system of an embodiment of the instant invention,utilizes a rules-based platform (service, engine, program, subroutine,or other suitable function) to determine whether each card is to bepositioned as an escheat card slated for possible escheat or as anon-escheat card slated for possible derecognition. Cards slated forescheat are tagged as being subject to escheat and assigned to be issuedby (or repositioned into) a first issuer's footprint, while cards slatedfor possible derecognition are tagged as non-escheat and issued by (orrepositioned into) a second issuer's footprint.

In a preferred embodiment of the instant invention, the individual cardpositioning method and system is used to ascertain and set the escheatstatus of each card on a per card basis. The use of this method enablescard issuers and card program designers to ascertain an exact ornear-exact status of the escheat profile of a portfolio as of anyspecified date. The ability to determine escheat on an exact ornear-exact basis enables an issuer to optimize revenue opportunities toan exact or near-exact maximum. In addition, the portfolio visibilityresulting from individual card positioning enables card issuers and cardprogram designers (or entity for which program has been designed tobenefit) to determine the exact or near-exact impact of program designs,escheat solutions, program features, and distribution methods upon theescheat of the cards and resultant revenue opportunities. Thisvisibility also enables issuers and program designers to ascertainunintended escheat consequences of program designs, escheat solutions,program features and distribution methods.

In a preferred embodiment, the individual card positioning method andsystem is used to split a portfolio into segments based upon the escheatstatus of the portfolio. This method enables cards to be accuratelyplaced into classes or groups for the purpose of split issuance, atransfer of a portion of a portfolio, opinion letters, risk assessment,portfolio analysis, and the like. In a preferred embodiment, theindividual card positioning method is used to assign the footprints of amultiple footprint system and position and populate the cards amongvarious footprints within the multiple footprint system. The cards in aportfolio are split or separated by reference to the escheat status ofeach card, and each card is populated in the proper footprint and placedwith the proper issuer in a multiple footprint system based upon theescheat status of the card. This process requires the use of individualpositioning to ascertain the escheat status of the cards on a per cardbasis, and to position and populate the card in the proper footprint.FIG. 2 and FIG. 3, discussed above, illustrate configurations for theuse of multiple footprint systems to issue cards. FIG. 5, discussedabove, illustrates the use of individual card positioning to positioncards among the multiple footprints.

In the preferred embodiment discussed herein, the instant inventionemploys a process, system and method of combining the individualpositioning method with the multiple footprint system to enable anissuer (or issuers) to assess and/or optimize the revenue generatingevents regarding the breakage of a portfolio on an exact or near-exactbasis. Under this process, an issuer combines the individual positioningmethod with a multiple footprint system: first, to use individualpositioning to diagnose, determine and assign optimal escheat footprintsfor the multiple footprint system and thereby structure the multiplefootprint system in an optimal configuration; second, to individuallyposition each card by its escheat status with the proper footprint ofthe multiple footprint system and thereby optimize the escheat priorityrules; and lastly, position each card within the footprint itself andthereby optimize the escheat laws of the footprint's jurisdiction. Thisprocess, system and method optimizes escheat compliance and maximizesrevenue generating opportunities on an exact or near-exact basis.

Referring to FIG. 6, illustration of the uses of the vertical individualcard repositioning method and process of a preferred embodiment isshown. The escheat status of a card will depend highly upon various lawsand variables that likely will change over time. The escheat status of acard also will be related to the issuer's (or the entity for which theprogram has been designed to benefit, if that entity is not an issuer)directives for the card program, and the directives may change overtime. Therefore, after a card is initially individually positioned, itmay need to be individually repositioned to reflect pertinent changes.To address such changes in the variables impacting escheat, the instantinvention employs an individual card repositioning method and processunder which the escheat status of each card is continuously orperiodically (i.e. daily, weekly, monthly, etc.) reevaluated todetermine and reset the escheat status of the card with respect to legalvariables, factual variables, and issuer directives.

The use of individual card repositioning to reposition the escheatstatus of a card within a single footprint is referred herein as“vertical repositioning.” In the preferred embodiment of the instantinvention, this method is used to reposition cards within the singlefootprint of a single footprint model or within one of the footprints ofa multiple footprint system. FIG. 6 illustrates the use of verticalrepositioning to change the escheat status of a card. In FIG. 6 a cardslated for future escheat in a five escheat year state is partially usedsix months after it is issued. When the card was sold, the card wasslated for future escheat under an applicable state's law, and wasslated to be presumed abandoned five years after it was sold and to beescheated to the state six months later. Upon the partial use of thecard six months after it was sold, the escheat clock rest and the cardwas repositioned to escheat on a later date. In the example illustratedin FIG. 6, the vertical repositioning of the card extends the filingdate for the card an entire year due to the annual filing deadline forthe escheat state.

Vertical repositioning has a substantial impact upon a portfolio. Forexample the extension of an escheat filing date creates additional floatand cash flow and allows additional fees to be assessed in programswhich charge back-end fee. FIG. 6 provides only one example of the useof vertical repositioning to optimize the management of escheat.Vertical repositioning is used with respect to other changes in facts,laws, and directives that result in a change in the escheat status of acard, including changes that result in a card that was slated for futureescheat being converted into a card that is eligible for derecognition.As a result, the individual repositioning method and system enables theissuer to optimize the impact of changes in escheat variables on a nearor near-exact basis.

Referring to FIG. 7, illustrations of the uses of the horizontalindividual card repositioning method and process are shown. Theembodiment of the instant invention shown also employs an individualcard repositioning method and process under which the escheat status ofeach card in a multiple footprint system is continuously andperiodically (i.e. daily, weekly, monthly, etc. or in real-time upon theoccurrence of certain events) reevaluated to determine and reset theescheat status of each card and to reposition a card from one footprintto another footprint. In a preferred embodiment, each card isreevaluated on a continuous or periodic basis with respect legalvariables, factual variables, and issuer directives to determine andreset the escheat status of each card. When required, the card isrepositioned from one footprint to another, and the issuer's obligationson the card is transferred from one footprint issuer to anotherfootprint issuer to take advantage of the change in the card's escheatstatus.

The use of individual card repositioning across multiple footprints in amultiple footprint system is referred to herein as “horizontalrepositioning.” FIG. 7 illustrates the use of horizontal repositioningto take advantage of a change in the escheat status of a card. Theembodiment shown in FIG. 7 includes a number of cards sold as part of aportfolio and initially positioned utilizing the systems and methods ofthe instant invention into on of two footprints (a slated for escheatfootprint, and an eligible for derecognition footprint), including a$200 gift card sold in New Hampshire that is partially used six monthsafter it is sold to purchase goods in the amount of $150. At the time ofissuance, the card is slated to escheat to New Hampshire and ispositioned in a footprint in a state that has favorable escheatattributes. New Hampshire exempts cards under $100 from escheat.Therefore, upon the partial use of the card, the card is repositionedfrom being slated to escheat to being slated as eligible forderecognition. At that time, the card is horizontally repositioned to beissued by an issuer domiciled in a non-escheat state to assure thatescheat does not occur under either the second or third priority rules.The end result is a $200 card slated for future escheat becoming a $50card eligible for derecognition.

Referring to FIG. 8, a schematic diagram of a configuration of apreferred embodiment of a multiple axis rules-based systems processingplatform is shown. The individual positioning and individualrepositioning of cards by their escheat status on a continuous orperiodic basis requires the application of large numbers of escheatvariables to the large volumes of cards comprising a card portfolio.²³Therefore, the system of using the individual positioning method andindividual repositioning method either in a single footprint system orin combination with a multiple footprint system is integrated andexecuted in an automated process. FIG. 8 is a schematic diagram of aconfiguration for a preferred embodiment of the instant inventioncomprising the use of a multiple axis rules-based systems processingplatform to integrate and employ the individual positioning method andindividual repositioning method in a single footprint system or incombination with a multiple footprint system on an automated basis tomanage escheat and/or derecognition of cards in a card program on anexact or near-exact basis. In this preferred embodiment, the cards maybe processed internally by an issuer, through a third party processor,by a third party compliance company, or through a combination thereof.The embodiment of the invention shown in FIG. 8 is well-suited forreal-time, near real-time, and batch positioning, repositioning, andreporting. ²³The instant invention is capable of processing millions ofcombinations of escheat variables arising from the multiple layers ofescheat laws and legal variables, varying factual scenarios, anddiffering issuer directives. The instant invention is capable of doingso with respect to large volumes of cards including the millions ofcards and billions of card transactions encountered with respect to thelargest of the existing portfolios.

In the embodiment of FIG. 8, detailed transaction data and/ortransaction history for each individual card are either continuously orperiodically, such as once per month, transmitted from the Issuer or theIssuer's transaction processor to the processing platform of the instantinvention. The instant invention analyzes individual cards that may betargeted for escheat, and positions or repositions individually eachcards with and issuing system to achieve optimum compliance withapplicable unclaimed property laws while either minimizing or maximizingthe amount of funds escheated to the appropriate jurisdictions andsimultaneously minimizing or maximizing derecognition opportunities andother revenue generating events. At the directive of the issuer (orentity for which a program is designed to benefit), this instantinvention may be employed to process all forms of issuing systems,including single footprint systems and multiple footprint systems in allcombinations and forms.

In the embodiment shown in FIG. 8, required factual information aboutthe Issuer, cards, and program, along with the Issuer's directives anddecisions, are inputted to construct an Issuer Profile that is stored ina database maintained by or on the systems processing platform.²⁴ FIGS.19 a through 19 c show exemplary screen shots of a graphical userinterface (GUI) utilized to access, create, edit and review the IssuerProfile for each Issuer stored in the database. Referring to FIGS. 19 athrough 19 c, client facts include such information as Card Issuer(i.e., the Issuer's name), ID (a unique identification code used by theprocessing platform for storing data, files or other information,relating to a particular Issuer), SIC (Standard IndustrialClassification) codes for the Issuer, company type (i.e., LLC,Corporation, etc.) of Issuer, Status (i.e., prospective, active orinactive client/customer of the third party service provider), user idand password (for accessing Issuer-specific extranet portions of theplatform), frequency of card data (i.e., data stream provided andanalyzed by the platform monthly, weekly, quarterly, etc.), contactinformation for Issuer technical representatives, Issuer's principalplace of business address, Issuer's filing address (e.g., state ofincorporation), Issuer's billing address, Issuer's Margin (certainstates allow a Issuer to deduct the cost of goods sold when reportingunclaimed property), types of Card Programs utilized by the Issuer, andstates in which the Issuer holds ownership of cards issued by the Issuer(i.e., through one or more subsidiaries or through a third party), andnames of the holders of such cards. Issuer decisions/directives include,among others, information as the selection of footprints, the use triageprocesses (discussed further below), and directives regarding theIssuer's preferences and risk tolerances in implementing escheat andderecognition of the cards. ²⁴In a single footprint system, one IssuerProfile is used. In a multiple footprint system, multiple IssuerProfiles are used.

A Card Program Profile contains relevant factual details concerning thecard portfolio that must be aggregated and processed. The Card ProgramProfile contains details about the nature of the loop on which the cardprogram is operated (i.e., open-loop, closed-loop, partially open-loop,and the like) required for escheat processing. The Card Program Profilealso contains pertinent details about the terms and conditions for thecards in the portfolio required for escheat processing (i.e., expirationdates, fees, cash back, and the like). In the embodiment of the instantinvention shown in FIG. 8, Card Program Profile facts are entered,edited, saved and/or deleted in a database accessed by the third partyservice provider. The Card Program Profile inputs are stored in adatabase and are accessed by the systems processing platform of theinstant invention for selection in the Issuer Profile and for use in oneor more of the applications of the instant invention discussed below. Inthe current preferred embodiment, six types of card programs loops areprocessed including: single store/retailer loop; multiple affiliatedstores/retailers loop; multiple unaffiliated stores/retailers loop;multiple unaffiliated stores/retailers loop issued by a federalfinancial institution; multiple unaffiliated stores/retailers loopissued by a state financial institution; and multiple unaffiliatedstores/retailers loop issued by a licensed money transmitter. Each ofthese six types of loops are processed in conjunction with respect tokey facts regarding the terms and conditions governing the cards,including whether or not the cards have an expiration provision, whetheror not the consumer is allowed to obtain cash back from a card (in up tothree formats), and whether or not the Issuer deducts a fee from thebalance of the card. This results in a combination of 48 or morepossible program fact options in the current preferred embodiment for aIssuer to utilize. In addition, in a preferred embodiment, a testprogram option is created for testing purposes, resulting in a total of49 or more possible program options.

In the embodiment shown in FIG. 8, the detailed account transaction dataand/or transaction history for each card sold by a Issuer is transmittedfrom the database of the Issuer or the Issuer's transaction processor tothe systems processing platform of the instant invention. Depending uponthe configuration, the systems processing platform of the instantinvention may be operated by the Issuer, by the Issuer's transactionprocessor, by a third party compliance company, or a third partycompliance processor. Encryption and privacy filters are positioned atmultiple locations in the system at points prior to the receipt oftransaction data by the systems processing platform. Depending upondirectives by the Issuer, these filters can be used to keep or escrowpersonally identifiable information about card owners (along withsecurity sensitive information subject to PCI standards such as cardnumbers) at the Issuer, at the Issuer's transaction processor, at thethird party compliance company, at other third party locations, or anycombination of the foregoing. These filters permit the Issuer to controlthe location of personal card owner information and security sensitiveinformation for security and privacy reasons, and also prevent the thirdparty service providers from being obligated to comply with variousprivacy and security standards (such as PCI standards and the like)relating to the type of data and cards at issue. The encryption filterinputs the card data at the designation location in the system andencrypts each card account number (along with magnetic stripeinformation if required) and replaces the card number with a uniqueencrypted alias identification number which is used for the processingrequired by the instant invention. Personal information above cardowners are either filtered to physically prevent access by one or moreIssuers, third parties or participants in the process, or is encryptedin a manner that makes access to the personal information physicallyimpossible, or is disassociated from the card number by a process thatelectronically unlinks the personal information and card number.

After the card account numbers have been replaced with aliases, the datastream or file is transmitted for processing by the systems processingplatform of the instant invention. The data stream or file becomes aninput for the Data Aggregation Service/Platform component of the instantinvention where it is processed by one or more applicable ETL (extract,transform, and load) software applications operating on the DataAggregation Service/Platform. In the embodiment of FIG. 8, a data fileis transmitted and stored in a storage location (such as a directory orfolder on a storage drive) with which the ETL service is associated. TheETL service accesses the data file from the storage location andstandardizes the data for use by subsequent applications or services ofthe platform of the instant invention. The ETL then stores thestandardized data in one or more storage locations and/or files in aProduction Data Store for access by the various applications of theinstant invention. In one embodiment, the ETL is customized based uponthe data format and protocols of the particular Issuer from which thedata is being transmitted. Nevertheless, it will be appreciated that asingle ETL program may be utilized that is capable of standardizingvarious differing data formats and protocols from multiple Issuerswithout departing from the spirit and scope of the instant invention. Ina preferred embodiment, the ETL is located on a segmented server tomaximize processing capabilities and reduce application processingtimes. Nevertheless, it will be appreciated that one or moreapplications (such as ETL and any of the applications of the inventiveplatform discussed below) may be combined onto a single server, computeror other suitable appliance without departing from the spirit and scopeof the instant invention.

In a preferred embodiment, the ETL service creates multiple data fileoutputs from the data stream (or file) received from a Issuer and storesthose files in separate storage locations (e.g., directories or folders)within the data store. This allows each subsequent application of theinventive platform (such as the Escheat Service, the Forecast Serviceand the Derecognition Service, discussed below) to utilize separate datafiles that contain only the specific data needed by those applicationsto perform their service (e.g., the ETL filters data from within thedata stream that is not needed for processing or analysis by a specificservice). In addition, in the event that personal information about cardowners is provided with a third party operator of instant invention,such as a third party compliance processor, in the preferred embodiment,the ETL removes the personally identifiable information from the datastream and stores such information in a separate encrypted file in adata store, so that such information is not readily accessible by theemployees of the compliance company.

As is discussed above, the card transaction data is provided forprocessing in a continuous basis or at standard intervals by batch forprocessing through the systems processing platform of the instantinvention. After the data is processed by the ETL, one or more of thefiles created and stored are accessed by the applications or services ofthe instant invention. One data file created by the ETL is for use withthe Escheat Service. That file is saved as a text file in a storagelocation (folder) in which the Escheat Service “looks” for any new data.The Escheat Service then pulls the file from the storage location,schedules, batches and analyzes the card data providing final reportsthrough the use of output files for each batch that may be used to showthe Issuer how card values are currently categorized.

In a preferred embodiment, the input file for the Escheat Service (whichis an output file from the ETL), includes without limitation thefollowing information, if collected by Issuer, regarding each individualcard within a batch of cards of a Issuer's Card Program: card alias;card balance (after any and all program fees); sold amount of the card;sold date of the card; the state in which the card would be registeredto a purchaser (i.e., state in which the purchaser resides if and asshown only by the transaction data of record), if it is later determined(through the Fragment Filter discussed below) that enough informationexists for the card to be considered registered; state in which a cardwould be registered to a card recipient (other than the purchaser), ifit is later determined (through the Fragment Filter discussed below)that enough information exists for the card to be considered registered;the state in which the card was sold; the date of the user's lastredemption on the card; the expiration date of the card; whether thepurchaser's name, street address, P.O. Box, city, state, zip code, oremail has been recorded in the transaction data of record, if any,accessible by the Issuer (and, if so, with each one is recorded as a yesor no—1 or 0, if the actual information will have been encrypted byETL); and whether the recipient's name, street address, P.O. Box, city,state, zip code, or email has been recorded in the transaction data ofrecord, if any, accessible by the Issuer (and, if so, with each one isrecorded as a yes or no—1 or 0, as the actual information has beenencrypted by ETL). In a preferred embodiment, the input file for theEscheat Service is stored using a batch ID/File name that includes theIssuer's ID (from Issuer Profile), Issuer's Card Program ID (from IssuerProfile), the date to which the analysis is applied, and a sequencenumber to identify the particular batch. This input data file is inputinto the Escheat Service and the above data for each card/alias isindividually analyzed by the Escheat Services multi-axis rules engine.

Each card within a batch of cards is analyzed by the Escheat Serviceindividually to determine whether or not each individual card will besubject to escheat, and when and where it will be subject to Escheat.Depending upon the Issuer Profile information (e.g., Issuer Programs,Holder States, Triage Products), the Escheat Service will position orreposition cards to minimize (or alternatively to maximize, or to obtainsome other desired result based upon selections made by the Issuerwithin the Issuer Profile) the escheat and derecognition for unusedcards and otherwise perform the functions and processes described above.In a preferred embodiment, the Issuer Profile is configured to utilize amultiple footprint model, in which cards may be held by and positionedor repositioned in one of at least two different issuing entities.Nevertheless, it will be appreciated, that the Escheat Service may beutilized in connection with a single footprint system as well. FIG. 10is a schematic diagram of a preferred embodiment of the Escheat Servicecomponent architecture of instant invention shown in FIG. 8.

In processing the input data, the Escheat Service utilizes a FragmentFilter (shown as the First Priority Filter on FIG. 8) and State LawTables (defined below) to analyze who owns the card and whether or notthe card is registered based on the applicable state law. Then theEscheat Service utilizes and Escheat Decision Tree (discussed below) andthe State Law Tables to analyze the card for escheat andpositioning/reposition for each card within a batch. The EscheatService's output is an Analysis File or Analysis Data Base that isstored in the Production Data Store and utilized to generate variousreports in the Reports Platform. In a preferred embodiment, the AnalysisFile is stored using a batch ID/File name that includes the Issuer's ID(from Issuer Profile), Issuer's Card Program ID (from Issuer Profile),the date to which the analysis is applied, a sequence number to identifythe particular batch, and information to identify the file as anAnalysis File. Such a naming structure eliminates the need to includeIssuer ID and Program ID with every individual card. Referring to FIG.21, an Analysis File of a preferred embodiment includes the followinginformation (i.e., columns) for each individual card (i.e., rows) withina batch: Alias, Class, Holder State, Escheat State, Escheat Amount,Escheat Date, Escheat Due Date, Available For Earnings Amount, DecisionTree Version, Registered State Profile Id, Sold State Profile Id, HolderState Profile Id, Escheat State Profile Id, Paper, Sold Date, SoldAmount, Last Use Date, Adjusted Escheat Amount, Adjusted Available ForEarnings Amount, and Deliverable Address. In addition, in a preferredembodiment, a Audit Trail (defined below) is generated during theanalysis and stored for subsequent historical use and/or recreation ofdata runs and audit purposes.

As part of its analysis, the Escheat Service first utilizes the FragmentFilter to determine two outcomes: First, who is the actual owner ofrecord of the card as between the purchaser and the card recipient basedon the actual information on the transaction data records, if any,accessible by the Issuer. Second, whether sufficient actual addressinformation exists in the transaction data of record accessible by theIssuer for the actual owner of record to require the first priority ruleto an individual card within a batch. To perform this analysis theFragment Filter accesses the State Law Tables to determine the amount ofinformation that is required by a particular state in order for anaccount to be considered registered for the purpose of the firstpriority rule or similar rule. In some states, the Fragment Filterutilizes the following equation to determine whether sufficient addressinformation is available:Sufficient=(Street OR P.O. Box) AND ((City AND State) OR (Zip OR Zip+4))

The State Law Tables, accessed by the Escheat Service, in the embodimentshown in FIG. 8 are created by a third party compliance provider and arestored in a database or other appropriate storage medium that isassociated with the Escheat Service. Referring to FIGS. 20 a through 20d, the State Law Tables include multiple State Profiles with each StateProfile having details on pertinent legal attributes of the applicablestate's escheat laws, and is stored with respect to general attributes,program loops (e.g., single store closed-loop, or multiple storeopen-loop), pre-escheat notices, state escheat filings, and the like,based upon the escheat laws in each state at any give effective date.

The State Law Tables are populated by State Profiles containing thedetails upon which each card is evaluated through the Decision Treelogic of the Escheat Service for the different priority rules, differentversions of each priority rule, each jurisdictions specific escheatlaws, and the historical versions of these rules and laws. The State LawTables are continuously updated to add or modify profiles as the escheatlaws of a state are modified by new legislation. Historical versions ofstate laws are maintained in a historical version drive of the state lawtables, which is accessible by the Escheat Service in accordance withrules governing retroactive or prospective application) to ensure thatproper version of a state's laws are applied to a card that is beinganalyzed, and to allow for historical data runs to test data or torecreate prior analysis and properly apply the application historicallaws.

Referring to FIG. 20 a, each State Profile includes the following fieldsin the General tab: State; ID (Identifier used to associate which StateProfile was used by Escheat Service analysis; Effective Date (Date uponwhich State Profile parameters are applicable; Effective Date Type(e.g., Presumed Abandoned On or After); Definition of Domicile (e.g.,state of issuer entities' Filing); Third Priority Provision (Determinesif the State has enacted the Third Priority Rule); Year Start Date(e.g., start date of fiscal year); Year End Date (e.g., end date offiscal year); Month Due (the date escheat payment is due to the state);Legal Annotation (e.g. explanation of inputted state field—user notesfield); Admin fee deductions allowed (Determines if the State allows theIssuer to deduct administrative fees from the appropriate Card valueprior to escheat); Admin fee deduction method (Determines which methodis used to calculate administrative deduction taken from the appropriateCard value prior to calculation of amount eligible for escheat); Adminfee amount (Flat amount of the administrative deduction taken from theappropriate Card value prior to calculation of amount eligible forescheat); Admin deduction (Percentage amount of the administrativededuction taken from the appropriate Card value prior to calculation ofamount eligible for escheat; Last Known Address Definition (i.e., doesthe state require a deliverable U.S. mail address for a card to beregistered); Registered Owner Recipient Only (e.g., does the staterecognize the card recipient as the only valid owner).

Referring to FIG. 20 b, each State Profile includes the following fieldsin the Retailer tab for each of the six types of retailers: Retail Type(e.g., Single Store Retailer); Sold Cards deemed registered (Determinesif the State considers a Card sold within its borders is registered tothe State); Store exempt minimum provision (Determines if the Stateexempts from escheat appropriate Card values less than or equal to adesignated amount); Store exempt minimum trigger (e.g., balance, soldamount); Store exempt amount (Amount at which appropriate Card valuemust be equal or less than for that Card to be exempted from escheat);Store abandonment trigger (Determines which date—sold date, last use,expire date, Store abandonment Start Month, Earlier of Expire Date orAbandon Period from Last Use Date, Earlier of Abandon Expire Period fromExpire, Date or Abandon Period from Last Use Date, Abandon Expire Periodfrom Expire Date if exists or Abandon Period from Last Use Date if noExpire Date—is used to calculate if a Card should be considered“Abandoned”); Store abandonment start month (State-mandated date to useto calculate if a Card should be considered “Abandoned” if Start Monthis the trigger; Store abandonment period (Period of time in months usedto calculate when a Card is considered “Abandoned”); Store abandonmentexpire period (Period of time in months used to calculate from theexpire date when a Card is considered “Abandoned”); Does State escheat(Determines if the State escheats—or in other words, has relevantescheat/unclaimed property laws); Escheat Trigger (Determines whichappropriate Card value is used to calculate amount held for escheat);Escheat Method (Determines which method is used to calculate amount heldfor escheat—e.g., Percentage); Escheat amount (Percentage or amount ofthe appropriate Card value that is held for escheat); Store expireprovision (Determines if a state requires escheat because a Card has aan expiration date); Reverse expire provision (Determines if a staterequires escheat because a Card does not have an expiration date); Storecash back provision (Determines if the State requires escheat if theCard Program has a cash back feature); Label (Determines the appropriatevalue of the Card before it requires escheat based on store cash backprovision); Store cash back impose (Determines if the State requires theIssuer to provide cash back regardless of the Card Program features);Store Cash back impose amount (Determines the amount at which theappropriate Card value must be equal or less than before the Staterequires the Issuer to provide cash back); Store program fee provision(Determines if the State requires escheat if the Card Program appliesfees to the Card); exempt issuer primarily selling tangible personalproperty at retail (determines if a state exempts a retailer if theysell personal property at retail).

Referring to FIG. 20 c, each State Profile includes the following fieldsin the Notice tab: Notice Threshold Amount (Determines whether a noticemay be required to be sent based on the appropriate Card value greaterthan or equal to); Statute Of Limitations (Determines whether a noticemay be required to be sent based on the appropriate statute oflimitations of the Card); Earliest (the earliest date a notice can besent per state statute); Latest (the latest date a notice can be sentper state statute).

Referring to FIG. 20 d, each State Profile includes the following fieldsin the Filing tab that relate to requirement for filings made relatingto escheat with the state: Aggregate Max Amount (Determines the maximumamount of the appropriate Card value that it can be filed with otherCards of like value); Relation To Owner (Determines the owner code usedfor the electronic filing); Media Type (Determines the type of mediaused for the electronic filing, e.g., diskette or CD-ROM); Property TypeCode (Determines the property code used for the electronic filing);Aggregate Property Type Code (Determines the property code used whenfiling Cards in the aggregate); Deduction Code (Determines the code usedwhen filing to classify discounts or deductions); Is Encryption Required(Determines if an electronic file is required to be encrypted whenfiling).

The Escheat Service uses two types of Effective Dates to determine whichhistorical version of a State Profile to apply to a particular Card withrespect to states that have altered their unclaimed statutes over time.The first type is Sold Date where only Cards sold on or after theEffective Date will use that version of the State Profile. The secondtype is Presumed Abandon on or After where only the cards that have apresumed abandonment date on or after the effective date will use thatversion of the State Profile. The escheat service analyzes the Cardusing the abandonment period from the prior version of the State Profileto calculate the abandonment date (Presumed Abandoned Date) in order tosee if it is on or after the current version of the State Profile. TheEscheat Services analyzes either the Sold Date or the Presumed AbandonedDate for all Cards to determine the appropriate State Profile to be usedfor Evaluation.

The abandonment trigger varies greatly by state laws. Following areexamples of how the Abandonment Trigger may be used in the EscheatService Decision Tree: Sold Date (Escheat Service will calculateabandonment by adding the Abandonment Period to the Card Sold Date);Last Use Date (Escheat Service will calculate abandonment by adding theAbandonment Period to the Card Last Use Date, or if no Last Use Dateexists, to the Card Sold Date); Expire Date (Escheat Service willcalculate abandonment by adding the Abandonment Period to the CardExpire Date); Abandon Start Month (Escheat Service will calculateabandonment by adding the Abandonment Period to the Abandon Start Monthdictated by the State); Earlier of Card Expiration Date or AbandonPeriod from Last Use (Escheat Service will calculate abandonment byevaluating which date is earlier the Card Expiration Date or Card LastUse Date plus the Abandon Period, or if no Last Use Date exists, theCard Sold Date plus the Abandon Period); Earlier of Abandon Period fromCard Expiration Date or Abandon Period from Last Use (Escheat Servicewill calculate abandonment by evaluating which date is earlier the CardExpiration Date plus the Abandon Expire Period or Card Last Use Dateplus the Abandon Period, or if no Last Use Date exists, the Card SoldDate plus the Abandon Period); Abandon Expire Period from CardExpiration Date if exists or period from Last Use if no Expiration Date(Escheat Service will calculate abandonment by adding the Abandon ExpirePeriod to the Card Expiration Date, or if no expiration date exists, byadding the Abandon Period to the Card Last Use Date).

The Escheat Service of the instant invention uses a Decision Tree toprocess the analysis of the escheat status of each card. Each card isprocessed through the Decision Tree of the Escheat Service. The DecisionTree processes all pertinent legal variables (priority rules, individualstate provisions, and the like) the pertinent factual variables(specific to the issuer, program, each card, and the like) and theIssuer's directives for the purpose of setting the escheat andderecognition status of each card and managing the cards slated forfuture escheat. Card data is logged and stored in a file in theProduction Data Store for each condition in the tree, and for subsequentretrieval and use after the Escheat Service analysis has been concluded.In a preferred embodiment, any previous versions of the Decision Treeare maintained for historical records and audit purposes.

The first evaluation of the Decision Tree is to determine if the Cardshould be fully processed through the Decision Tree. For example, a Cardwith a $0 balance is not subject to full processing and is classified as“Used.”

Cards that are not classed as used shall then begin the first priorityevaluation through use of the First Priority Filter, determining if theCard is registered and therefore will not reach second or third priorityevaluations. If the Card is not registered to a card owner (i.e.purchaser, recipient and address), the Escheat Service then evaluateswhether the Sold State deems the Card to be registered to the SoldState. If the Card is registered or deemed registered, then the EscheatService evaluates whether or not the Registered State escheats andtherefore might prevent second or third priority evaluations. If theRegistered State does escheat then the Escheat Service evaluates whetherthe appropriate exempt minimum Card value specified by the State is met.If the exempt minimum is met, the Card leaves first priority andrequires second priority evaluation. If the Registered State does notescheat, the Escheat Service evaluates all other Card features that maystill make the card escheat (conditional escheat) to the RegisteredState (such as expiration, cash back, fee features, and the like). Thissingle condition evaluates both State provisions and Card Programprovisions for based upon the feature being evaluated.

If the Card has reached second priority evaluation, then the EscheatService determines whether or not the Holder State escheats andtherefore might prevent third priority evaluation. If the Holder Statedoes not escheat, the Escheat Service evaluates all other Card featuresthat may still make the card escheat to the Holder State. This singlecondition evaluates both State provisions and Card Program provisionsbased upon the feature being evaluated. If the Holder State does escheatthen the Escheat Service evaluates whether the appropriate exemptminimum Card value specified by the State is met. If the exempt minimumis met, the Card leaves second priority and requires third priorityevaluation.

After evaluating first priority and second priority, the Systemdetermines if the Sold State requires third priority evaluation becausethe Sold State has enacted the third priority rule. If the Sold Statedoes not escheat, the Escheat Service evaluates all other Card featuresthat may still make the card escheat to the Sold State. This singlecondition evaluates both State provisions and Card Program provisionsfor both potential and actual values based upon the feature beingevaluated.

The Optimal Holder State Analysis determines which result set producesthe most beneficial non-escheat or escheat situation for the Card. TheEscheat Service evaluates all scenarios to select the best outcome forthe Card, evaluates all cards individually, and compiles the results ofthe analysis per batch for reporting. The first evaluation of theOptimal Holder State analysis is to find the result set with thegreatest amount logged as “Available for Earnings”. If two values matchor the Card does not have any amount written to “Available for Earnings”additional evaluations are performed.

A Card Issuer set to the status of “Sales” results in additionalanalysis via the Escheat Service when a data set is presented. TheEscheat Service first creates a “Baseline” analysis which will use onlythe assigned Holder State and Card Program to analyze the Card data andprovide summary data. After the Baseline analysis, the System proceedsto analyze the Card data using each individual Escheat Productregardless of assignment to the Issuer. Each run is summarized forreporting purposes.

Escheat Triage Products are Holder State combinations that havepredetermined results for optimal escheat solutions. During theevaluation of a Card, the Decision Tree may direct the Escheat Serviceto the Escheat Triage process which involves its own set of conditionsand evaluations. Each Issuer may choose an Escheat Triage Product basedupon the level of aggressiveness they would like for the portfolio.

A Card may reach Escheat Triage if it does not meet the Holder Stateexempt minimum or has gone through the Sold State evaluation and doesnot meet the Sold State minimum and is not registered to an EscheatState. Prior to performing the Decision Tree for any Escheat Product,the Escheat Service must determine if an Escheat Triage Product has beenassigned to the Issuer. FIGS. 12 and 13 (discussed below) show decisionflows for triage products of two embodiments of the invention.

After first evaluating the Card result sets for the highest amountwritten to Available for Earnings, the Escheat Service does anadditional evaluation if two results sets have the same amount. Thisevaluation determines which of the options provides the longest presumedabandoned period for any amounts also written to “Held for Escheat”.

Logging is a key component of the Escheat Service platform. The logfiles provide supporting documentation to all card sorting and DecisionTree logic. In a preferred embodiment, two types of files are createdvia the Escheat Service. The first type, the Analysis File, provides themajor Card output fields required for reports and the second typeprovides detailed information about all Card data inputs and outputsthroughout the Escheat Service. The Analysis Log files (also referred toas Audit Trails) contain a much more robust log of every conditionevaluated for the Card in the Escheat Service, as well as all inputs andoutputs. The Analysis Log files provide the substantiation that may berequired for audit and legal purposes. The file shall contain thefollowing data for all conditions: Condition name, Input values,Parameters evaluated, and Output. Both types of log files are stored inthe Production Data Store.

In the preferred embodiment, the systems processing platform can be usedto optimize the position of a card within a multiple footprint systemand, therefore, maximize on an exact or near-exact basis the breakagethat will be eligible for derecognition and other revenue generatingevents. FIG. 11 shows an example of a decision flow in the Decision Treeof the Escheat Service which separates cards slated for future escheatfrom cards slated not to escheat for positioning in different footprintswith one footprint using an issuer domiciled in a non-escheat state andthe other using an issuer domiciled in a favorable escheat state. FIG.12 and FIG. 13 show examples of a decision flow in the Decision Tree ofthe Escheat Service which separates cards slated for future escheat forpositioning in different footprints with the footprints using issuersdomiciled in different favorable escheat states to place the escheatcard with the best escheat state.

The Analysis File of the Escheat Service is utilized by the CardClassifier for classifying (or splitting) cards as into classes of cardsfor purposes described above. Referring to FIG. 9, a split issuerstructure is shown in which a retailer/Issuer is a first issuer ofcards, and a third party (CardCo) is a second issuer of cards sold bythe Issuer. In the embodiment shown in FIG. 9, the cards are classifiedinto to two classes with Class A consisting of the cards that are notslated for escheat and Class B consisting of the cards that are slatedfor future escheat by the Escheat Service. Cards that are classified bythe Escheat Service and the Card Classifier as being A Cards are held bythe Issuer if it is domiciled in a non-escheat state, or a subsidiary ofthe Issuer that is located in a non-escheat state. Cards that areclassified as B cards go through the a same or similar encryption andprivacy filter discussed above with respect to FIG. 8, to removepersonal information about the cards owners and to encrypt the cardnumbers, and the card data from the Escheat Service output file istransmitted to the second issuer, CardCo. CardCo processes the card datathrough a separate Escheat Service that processes CardCo's own multiplefootprint systems. Due to the privacy filter, CardCo will only receiveanonymous cards reducing the application of the first priority rule.Furthermore, the Escheat Service optimizes the cards in CardCo'smultiple footprint system to maximize escheat and derecognition of thecards under the second and third priority rules. The output files ofCardCo's Escheat Service are processed through its own card classifierto change some of the Class B Cards to Class A Cards (e.g., in light oftheir anonymous status) and the Class A Cards are positioned with anon-escheat footprint, while the remaining Class B Cards are positionedwith one or more escheat footprints, to minimize escheat and maximizederecognition or revenue generating events.

The Escheat Service provides a variety of reporting functions throughthe Reports Platform, including reports and/or populating forms forrequired state escheat filings, reporting regarding, creating andsending escheat notices to purchasers or card recipients, and auditresponses. The Escheat Service looks at cards on an individual basis,and positions cards, determines when cards are subject to escheat, etc.In positioning or repositioning cards, the Reports platform compares aprior evaluation period's positioning report to evaluate any changes ofholder for a particular card. If the holder state has changed, thechange is reported to allow the Issuer to properly account for thepositioning event.

The Escheat Service provides reports regarding the total amounts for acard portfolio without regard for possible future redemptions. This isbecause the Escheat Service only looks at or takes into account cardactivities over a given period (such as once a month); it does not takeinto account predictors for estimating redemption/breakage rates. Thus,the total amounts that are reported as subject to escheat or non-escheatare merely amounts that are potentially subject to escheat ornon-escheat, if purchasers were to never actually redeem their cards.The Forecast Service provides forecasting reports that are based uponindividual card data, but that also take into account actual historicalredemption/breakage rates over a Issuer's entire portfolio and/or otherpredictors for estimating redemption/breakage rates. In a preferredembodiment, the forecasting results are utilized by the Escheat Serviceto produce reports, which summarize the present and future dollaramounts from a Issuer's portfolio of cards which are escheat andnon-escheat. In a preferred embodiment, the forecasts use the age ofcards as the primary predictor of redemption/breakage. Notwithstanding,it will be appreciated that other predictors may be utilized, alone orin combination, without departing from the spirit and scope of theinstant invention. Other predictors, include, but are not limited to:amount remaining and/or amount activated on a card (e.g., a card with$100 on it is more likely to be redeemed than a card with less than$1.00 on it); zip code where card is sold or where purchaser/recipientreside (e.g., persons in certain geographic regions are more likely thanpersons in other regions to be more frugal); type of card (e.g., cardsthat can be utilized at multiple different locations or differentretailers are more likely to be utilized than cards that can only beutilized at a more limited number of locations or retailers); sector inwhich card may be utilized (e.g., “big box stores” vs. specialty goodsor services); information regarding the card purchaser/recipient (e.g.,child vs. an adult); and whether the card has been used or never beenused over a period of time.

Referring to FIG. 14 a schematic diagram of a Forecast Service of theinstant invention is shown. The Forecast Service processes thehistorical transaction data for a program (such as the data for all cardactivity for a Issuer, or entity for which the program is designed tobenefit, over a 5 year period). As described above, transaction data issent from the Issuer through the Encryption and Privacy Filters to theETL service discussed above. The ETL service creates and stores in theProduction Data Store, an input file for the Forecast Service. The inputfile from the ETL service is inputted into the Triangle Application, anda Transactions Triangle (defined below) is created and stored in theProduction Data Store. The Transactions Triangle is then utilized by theForecast application to create an Aged-Based Balance Triangle, whichshows the expected balance as a percentage of the original activatedbalance of a card based on age of the card. The Aged-Based BalanceTriangle data is then utilized by a Forecast Engine to conduct avariance analysis, to obtain Redemption Discount Factors and breakage,and to obtain stability factors. The data output from the ForecastingEngine is stored in a file, and subsequently a database table, for useby other services. In a preferred embodiment, the data output from theForecasting Engine is utilized by the Escheat Service (through ReportingPlatform) to produce reports in which the redemption discounted balancesare processed and reported for the cards slated for future escheat, thecards slated for derecognition and other segments or subsets of a cardportfolio as described above. FIG. 15 is a schematic diagram of theprocess employed by the discussed embodiment the instant invention inindividually positioning the redemption rate and breakage rate for eachcard for aggregation in determining redemption discounted balances. Inyet another preferred embodiment, the data output from the ForecastingEngine is utilized by the Reporting Platform to create reports to aIssuer regarding measures of 1) Terminal Breakage, i.e., the proportionof the activation amount for a card (or cards) that is not expected tobe redeemed, for possible derecognition, and 2) whether the rate ofredemption of the Issuer's cards is changing over time.

The main input to the Forecast Service of the embodiment shown in FIG.14 is the transaction data of all cards for that Issuer. From that data,the Triangle Application produces a Transactions Triangle matrix whichsummarizes the individual data of each card into data regarding eachmonth and year of issuance for the group of cards being evaluated (i.e.,Peer Group). For each month and year of issuance, the summarized dataincludes: 1) the total activation amount for all cards issued in thatmonth and 2) the total dollar amount of transactions (e.g., redemptionsplus a small amount of reloads) by month for subsequent months. Thematrix has a row for each month of issuance and a column for each monthof transactions. Since each row starts one month later than the previousrow, it has one fewer month of transactions and fills one fewer columnsthan the previous row, which gives the matrix a triangular shape. In apreferred embodiment, the Transactions Triangle is capable of holding atleast 121 rows of data, or ten years and one month. However, the instantinvention may have additional or less rows as needed or desired withoutdeparting from the spirit and scope of the instant invention.

The Transactions Triangle is in a worksheet which is an Excelspreadsheet in the embodiment shown in FIG. 14. Each cell includes thedollars from any transaction, including activation, for the calendarmonths in the appropriate row and column. Thus, the dollar amount for acard issued Jan. 31, 2008 and redeemed Feb. 1, 2008 will be included incells for January 2008 and February 2008 respectively, and theredemption will be considered to be on a one-month old card. The otherinput from the Triangle Application into the Transactions Trianglespreadsheet is a table of activation amounts by starting month, with thesame number of rows as the triangle.

The main outputs of the Forecast Service shown in FIG. 14 are: 1)monthly Redemption Discount Factors; and 2) summaries of breakage andredemption. Monthly Redemption Discount Factors show the expectedbalance as a percent of the activation amount, by month of age, from 1to 60 (in the preferred embodiment). The Redemption Discount Factors areused because the age of the card is a primary predictor of redemption.These factors estimate how much of the balance of a card of a certainage will be left at a later age for that same card.

FIG. 22 shows a sample output for the Forecast Service of the instantinvention, including a table of Redemption Discount Factors for oneIssuer.

In a preferred embodiment, the Forecast Service creates a report for theIssuer listing three measures of breakage: Arithmetic Breakage;Slope-Determined Breakage, and Terminal Breakage. The Forecast Servicealso creates a report listing two measures of the stability of theredemption over time: Drift; and Consistency. The Arithmetic Breakage isnot a forecast, it is just a summary of the Issuer's data.Slope-Determined Breakage shows the percent left on a Peer Group ofcards that reach an age when the balance is declining very slowly and isnot expected to go down by much after that. Terminal Breakage is thetheoretical limit of the balance—how much of the balance that isexpected to never be redeemed.

Regarding stability, Drift shows the underlying trend of the balance fora given age (e.g., Month 14) as the start date advances, and isdesignated as “Positive,” “Negative,” and “Stable.” For example, apositive drift for month 14 means that as time goes on, newer groups ofcards will have a higher balance at 14 months than older groups.Consistency measures how much the redemption patterns jump around fromyear to year over and above any drift. It shows the Issuer how reliablethe current redemption patterns will be in predicting next year'sredemption. Consistency is designated at levels from A (low variability)to D (very high variability).

Referring to FIG. 14, the flow of data through the Forecast Service ofthe instant invention is shown. First, the Triangle Applicationsummarizes the transaction data for an Issuer, which comes from atransactional data file and a card file, and puts that summarized datainto a triangle file and a table of activation amounts by month, both ofwhich are located in the Production Data Store. Both the triangle fileand the table go into an applications spreadsheet. The triangle, calledthe “Transactions Triangle,” goes into a worksheet with up to 121 rows,corresponding to the starting months, and 121 columns, corresponding tothe months of transaction. The diagonal cells of the worksheet have thenet value (activation amount less redemptions) in the first month forall cards activated in that month. For example, the cell in the January2008 row and the January 2008 column shows the net dollars ofactivations less redemptions during the first month for the January 2008group. The rest of the cells in a corresponding row show the netredemptions for all months after each activation month.

The Forecast Service spreadsheet uses the activation amounts andtransforms the Transactions Triangle, through a series of worksheets,into an “Age-Based Balance” triangle, also with 121 rows and columns. Inthis triangle, each row is still a starting month, but each column isnow a month of age. A cell in a given row (starting month) and column(month of age) contains the percent of the original balance for thecards that started in that month that is still unredeemed at that age.The percentages for each row decrease across the columns because thetotal dollars from redemptions for that group in any month after thefirst month will most likely outweigh any dollars from reloads, makingthe balance lower each month. Since the data starts five years back,cards in later starting groups have fewer months of transactions. Thismakes the Age-Based Balance matrix a triangle as before, except that inthis case the diagonal goes from the upper right to the lower leftcorner. FIG. 14 shows an illustration of the Transactions Triangle andthe Age-Based Balance Triangle discussed above.

The Forecast Service then uses a model (statistical model rules andfinancial rules) to compute the monthly Redemption Discount Factors andterminal and other breakage values from the age-based triangle. TheForecast Service also summarizes data from the age-based triangle toproduce measures of stability. The monthly Redemption Discount Factorsand Terminal Breakage are passed to the Escheat Service, which uses themto calculate the Redemption Adjusted Balances (described above) in thereports. The Forecast Service also derives the stability measures andissues a report to the Issuer with the breakage and stability measures.

The monthly Balance Factor for a given month of age is the estimatedpercent of the activation amount remaining on a card at the end of thatmonth. For example, referring to FIG. 22 the value of 6.9580% (rounded)for 20 months means that it is expected that a card issued for $100 willhave a balance of $6.96 at the end of the 20th month. Since the balanceon a card on the average goes down over time, the factors are decreasingby month. It is assumed that the balance for a card will decrease inproportion to these Redemption Discount Factors. Thus, if a group ofcards has an initial balance of $1,000, it is expected that theunredeemed amount will be 6.9580%*$1,000=$695.80 in 20 months. Orreferring to FIG. 22, if a card is 12 months old and has a $200 balance,it is expected that in 10 months, the cards will be 22 months old andhave a balance of:$200Factor(22)/Factor(12)=$200*6.4045%/11.2522%=$113.84.

The Forecast Service uses a forecasting model in the spreadsheet toderive the monthly Redemption Discount Factors from the age-basedtriangle. First, the dollar balance is summarized by column (i.e., monthof age) to get a “raw” average balance for each month of age. Since eachsucceeding column has one less cell than the last, the averages for theearlier months of age are based on more data and on earlier months thanthe later columns. For example, the first column represents balances forthe first month of cards issued during each activation month over thelast ten years, whereas the 121st column has only one cell, representingthe balance for the most recent calendar month available, which is the121st month of a card issued ten years ago.

In some embodiments of the invention, to make the averages morecomparable, the Forecast Service limits the averages to the first 36rows, or first 3 years of issue. In alternative embodiments, theForecast Service uses all of the rows but weights the balances by theissue amount, since many Issuers have seasonal business with the bulk oftheir activations (and resulting balance dollars) in one or two monthsof the year. In any case, the result is a row of average balances bymonth of age. These balances are generally declining, but jump aroundslightly, especially for the later months, which are based on fewermonths of data.

Next, to obtain Redemption Discount Factors that are more logicalpredictors of the balances and exclude inconsistencies that may beintroduced (e.g., an older card that is redeemed may have a largerimpact on its age group since there will likely be fewer older cardsstill having a balance), a curve is fitted through the pointsrepresented by the 121 raw balances. This curve better represents the“real” expected balance for each age. The best form of a curve was foundto follow the formula:Percent Balance for month t=a/(b+t)^(d) +c

where t=age of card (months) and a, b, c, and d, are positive constants.

As t gets large, the first term on the right hand side, a/(b+t)^(d),gets close to zero and the total approaches c. This gives the curve a“hyperbolic” shape, meaning that it gets closer to a horizontal line ofheight c, which represents the portion of the balance that will never beredeemed.

The model derives values of a, b, c, and d using the least-squarescriteria to obtain a curve that most closely “fits” the 61 averagebalances. This is done by computing the sum of the squares of thedifferences between the averages and their corresponding points on thecurve, and then using the Microsoft Solver routine in Excel to find a,b, c, and d which will minimize this sum. The combination of values ofthe constants that minimize this sum is unique. This process istherefore objective and replicable.

Suppose that the “best” values of the constants from Solver are a₁, b₁,c₁, and d₁. Then the monthly Redemption Discount Factors are computedfrom these values using the formula:Factor(t)=a ₁/(b ₁ +t)^(d) ¹ +c ₁, for t=1,2,3, . . . , 60

The formula provides the points on the fitted curve corresponding toeach month. The value of c₁ is the model's estimate of TerminalBreakage.

The term “fitted” may connote that the curve and therefore the factorsvary for different fits of the same triangle of numbers. Although thecomputational procedure is detailed, it will consistently yield the sameresults for a given triangle. This is in the same way that an arithmeticaverage of a given set of numbers (which is just another kind of“fitted” estimate) will always have the same value if it is computedcorrectly.

Arithmetic Breakage is the actual balance left for the oldest age groupin the Issuer's data. Arithmetic Breakage is included in the ForecastService report to show the Issuer the actual redemption rate. Many cardissuers erroneously think that their Arithmetic Breakage is the same asthe ultimate (terminal) breakage.

Slope-Determined Breakage is the breakage for the month of age where themonth-to-month decline in the Balance Factor is less than 0.25% of theprevious month's factor. This breakage is used in the Forecast Servicereport along with the month of age. The month of age shows the Issuerthe month in the life cycle that the redemptions slow down so much thatthe balance will not change by a significant amount.

Slope-Determined Breakage is derived using the following algorithm:Starting with t=1, compute PD(t)=1−Factor(t)/Factor(t−1),which is the percent decline in the Balance Factor, for successivevalues oft and stop at the first month t where PD(t) is under 0.25%. Ifthis does not happen by month 120, then the fitted curve can be extendedusing the balance curve equation discussed above for computing Factor(t)for t>120.

Terminal Breakage is the asymptotic limit of the balance curve that isfitted to the data. Terminal Breakage is reported to the Issuer to showthe “real” amount of the activated amount that will theoretically neverbe redeemed. In addition, either Terminal Breakage or Slope-DeterminedBreakage is used in the Forecast Service reports to compute the adjustedbalances after redemption on non-escheat cards. Basically, the totals ofadjusted non-escheat dollars are proportional to this value.

Terminal Breakage is an output of the curve-fitting model describedabove to find the Redemption Discount Factors. The fitted value of c₁ isthe level to which the balance curve approaches and is therefore theestimate of Terminal Breakage.

Drift is the underlying trend of the balance for at given age (e.g.,“Month 14”) as the start date changes. Drift is defined as the slope ofa line that is fitted to the balances for multiple Peer Groups of cardsmeasured at the same age (i.e., months since activation).

Drift is reported along with the month used to show the Issuer whetherthe redemption is increasing or decreasing over time, and whether theIssuer should change the amortization and other decisions accordingly.

Drift is derived by taking the balances for a given age over a sequenceof starting dates and removing the seasonal and irregular components,using a 12-month centered moving average. Then a line is fit though thedata to show the underlying trend. Below we describe the computation ofDrift in more detail.

1) Determine the age on which to base Drift. In a preferred embodiment,this is the age where the balance is the nearest to 5% over the TerminalBreakage. For example, in FIG. 22, the Terminal Breakage is 3.58%. Theclosest factor to 3.58%+5%=8.58% is Factor(16)=8.60%, so month 16 isused.

2) Obtain a centered moving average on the groups for that age. This isdone as follows. First, take the series of monthly balances for theappropriate age from that column of the age-balance triangle. Forexample, for 14 months, this data comes from the 14th column of theage-based balance triangle and represents the 14-month balances ofgroups that started in consecutive months (e.g., January 2008, February2008, etc.).

3) Then, obtain the centered moving average over 12 months for thisseries. A centered moving average averages two moving averages to“center” the average around that month. For example, for starting month19 in the series, the average of the 12-month moving averages for 1)Month 13 through Month 24 and 2) Month 14 through Month 25 are taken.Taking these two moving averages “centers” the months used on Month 19,since the “center” of 13 through 24 is 18½ and the “center” of 14through 25 is 19½; thus, the final average is centered on the middle of18½ and 19½, or 19. Obtaining moving averages has the effect of takingout seasonality and some of the random variation from the balance data,better showing the underlying trend. Since a moving average must include6 raw data points before and after each averaged point, obtaining thismoving average reduces the number of data points.

4) Fit a line through the centered moving averages. This is accomplishedby the least-squares criteria and can be done using the TREND functionin Excel. The points on this line will be used later to computeConsistency. Since the least-squares fit is unique, as it was for thebalance curve, this method is again objective and replicable.

5) Code the rate of increase to “Positive,” “Negative,”, or “Stable.” Inthe preferred embodiment, we code the percentage per year T to:Positive if T>0.1,Negative if T<−0.1, andStable if −0.1<=T<=+0.1

Thus, the report shows the Drift as Positive, Negative, or Stable.

Consistency measures how much the redemption patterns jump around fromyear to year, over and above any Drift. This is reported to the Issueralong with Drift and month of balance to show how reliable the currentredemption patterns will be in predicting next year's (or future)redemption. Thus, Drift may be positive, but a low Consistency will warnthe Issuer that next year's balances or breakage still may notnecessarily be higher than the current year.

Consistency is derived using the same month of age that was used forDrift. The series of centered moving averages (CMAs) and the points onthe least-squares trend line that was used for drift is used. For eachmonth in the series, the difference between the CMA and the trendedvalue for that month (e.g., the distance from the point to the line) iscomputed. The absolute value of this difference divided by the trendedvalue as a percent is taken. The average of all of the percents in theseries is then taken. Suppose, for purposes of example that theresulting average is 3.1%. Then the average group of cards has a balanceafter, for example 14 months, that deviates by an average of 3.1% fromthe underlying trend. Finally, this average X is coded into A through Dby:A if 0<=X<=2%,B if 2%<X<=4%,C if 4%<X<=6%, andD if X>6%.

In the example above, X=3.1% will be reported as a “B” for consistency.However, thresholds may be adjusted.

In a preferred embodiment of the instant invention, for the first yearof service for a Issuer, the third party service provider updates theabove measurements at the 3 and 6 month marks, and then at 6 monthsintervals. For each update, this would mean restating old transactionsif necessary and adding more months of history to the triangles, andthen redoing the factors and measures.

Each update of the Forecast Service includes tracking the estimates thatare based on the factors from the previous version. For example,consider a Issuer with the first run based on data ending with 1Q2009.After three months, in 2Q2009, the 1Q2009 portfolio of non-escheatcards, plus non-escheat cards issued during 2Q2009 are taken and the1Q2009 factors are used to estimate what the total non-escheat balancein this portfolio would be at the end of 2Q2009. This total is thencompared to the actual value of the portfolio at the end of 2Q2009. If,for example, the estimated value was $98M and the actual value was$100M, the factors are considered “98.0% accurate.” For a portfolio ofcards issued in a quarter, the Forecast Service may be used todemonstrate alternative schedules for the Issuer to account for TerminalBreakage on the books of the Issuer (e.g., take to earnings). In acurrent embodiment, three alternatives are processed: 1) Amortizing overtime in proportion to the redemption (which can be derived from theRedemption Discount Factors), 2) Doing a straight line from 0 to 60months, and 3) Doing a straight line for the month when 80% of theactivation amount is redeemed (again, shown by the Redemption DiscountFactors) to the 36th month.

The Escheat Service discussed above tells an Issuer (through reports)whether any individual card or group of cards will escheat and when itor they will escheat. The Redemption Discount Factors from ForecastService are used to estimate how much of the current balance of thecards will be left for escheat after redemptions. The RedemptionDiscount Factors can also be used to estimate the future redemptions ofnon-escheat cards or the terminal value (breakage) of these cards.

For escheat cards, it is assumed that the card issuer (Issuer) willhonor any redemptions that occur between the presumed abandonment dateand the filing date. Thus the balance for redemptions are adjusted untilthe filing date.

To adjust escheat balances for redemptions, examples of the factors areshown in the first table in FIG. 22. For each age of the card in months,the associated factor is the average remaining balance at the end ofthat month as a percent of the activation amount.

For a card or group of cards with a given age and escheat filing date,suppose that the total balance and amount slated for escheat is known.To adjust the escheat amount for redemptions, use the formula:ER=EC*Factor(age at filing)/Factor(age now),where

ER=amount of escheat adjusted for redemption,

EC=current balance scheduled for escheat, and

Factor(t)=the Balance Factor in the table for t months.

Example 1

A card with a $100 face value is 12 months old, has $60 left on it, andis scheduled to escheat 14 months from now. Then, age now=12, age atescheat filing=12+14=26, and EC=$100. From the above formula,ER=$100*Factor(26)/Factor(12)Looking in the table,=$100*5.6372%/11.2522%=$50.10.So it is expected that the balance will be $50.10 at filing time.

Example 2

A new card with a $100 face value is scheduled to escheat in 3 years andto file four months later. Use the formula with age at filing=36+4=40and age now=0.

Then,ER=$100*Factor(40)/Factor(0)=$100*4.4063%/100%=$4.41Note again that this example includes possible redemptions after thepresumed abandonment date, up until the filing date. To adjust thenon-escheat portions of hybrid card balances for redemption, it isassumed that the Issuer will take the non-escheat balance of the card atthe time that the Issuer files for the card escheating. The same formulais applied to the non-escheat balance of these cards.

Example 3

A $100 card is 12 months old and currently still has a $100 balance. Thecard is held in Alabama, which is a 60-40 state (the State takes 60% ofthe amount, and the Issuer keeps 40%) and the filing date for escheat is14 months from now. What will be the adjusted balance in 14 months?

Of the $100 balance, 40%, or $40, is non-escheat. Using the same formulawith the same factors as in Example 1, you get:Adjusted balance=$40*Factor(26)/Factor(12)=$40*$5.6372%/11.2522%=$20.04.To adjust balances of non-escheat cards for redemption we assume thatthe amount left over after redemption will be the breakage. To computethis amount, use the above formula with the bottom line of the table(“Slope-Breakage”) for the age of escheat.

Example 4

What is the estimated breakage for a non-escheat card 8 months old witha $50 balance? We get:EstimatedBreakage=$50*Factor(Terminal)/Factor(8)=$50*3.58%/16.3240%=$10.97.The choice of using slope-breakage rate for breakage in the ForecastService is arbitrary. Terminal Breakage could be used as an alternativeand would result in a slightly lower adjusted amount.

In the above-described embodiment of the Forecast Service, earnings aretaken by an Issuer on a portfolio basis; however, card transaction datais obtained/maintained/handled by the Escheat Service on a per cardbasis. The Derecognition Service reconciles any actual differencesbetween the portfolio basis and the per card basis. In addition, theDerecognition Service takes transaction data and settles accounts on aperiodic basis (such as monthly) between subsidiaries in amultiple-footprint model. This allows the Issuer in the embodimentdiscussed in connection with FIG. 9 to keep cash for a longer period oftime. Referring to FIG. 9, when a card is repositioned from the Issuerto one of the third party's subsidiaries, or vice versa, DerecognitionService provides reports that account for assets, liabilities and incomeon each respective entity's books. Derecognition Service accounts forthe transfers of assets, liabilities and income on a per card basis.

As is discussed above, the Derecognition Service also reconciles thefact that earnings are taken through the Forecast Service on a portfoliobasis with the individual card positioning basis. Derecognition Servicemaintains accounts (i.e., databases or spreadsheets, which are stored inthe Production Data Store), to track amounts that a Issuer has taken toearnings (through acceleration of earnings utilizing the balance curvesof the Forecast Service of the instant invention discussed above) withrespect to a given group or batch of cards (an “Accelerated EarningsAdjustment Account”). Derecognition Service determines the differencebetween the activation amount and the redeemed amount for the cards ofthe batch to obtain the “current” amount existing on those cards. In apreferred embodiment, this is determined based upon the age of a cardand the time in which the last activity occurred. At the point in whichDerecognition Service determines the likelihood of redemption is remote,the amount current on each card is subtracted from the “current” accountand added to a “contingent” account for the batch of cards.Derecognition Service then determines the difference between theAccelerated Earning Adjustment Account and the Contingent Account, andthat difference is taken to earnings (if positive) or is derecognizedfrom earnings (if negative).

The Reports Platform of the embodiment stated in FIG. 8 utilizes datastored in the Production Data Store and other Analysis Files or DataBases (including data from the Issuer Profile) to produce variousreports for a Issuer. In addition, the Reports Platform supports thegeneration of Escheat Notices to card owners (purchaser or recipient),generates forms for filing escheat amounts with the various states, andcertain responses to inquiries or audit requests from escheatjurisdictions. When generating Escheat Notices, the Reports Platformutilizes the First Priority Filter to determine if sufficient addressinformation is available regarding the card owner for the Issuer to sendthe required notice. All reports, filings, notices and associateddocuments are stored in the Business Data Store for archival purposes.FIGS. 23 through 29 show examples of various reports that may begenerated by the Reports Platform of the instant invention, including: aIssuer summary report summarizing escheat information for a batch ofcards; a cash report showing a breakdown of card information for eachsubsidiary in a multiple-footprint model; an escheat payable due reportshowing when, where and how much from a batch of cards will be subjectto escheat; a card notices report showing cards that require escheatnotices; a portfolio positioning report showing data regarding cardsfrom a batch that have been positioned and/or repositioned into variousentities of a multiple-footprint model; an aged escheat report showingescheat amounts that are expected to be payable taking into accountredemption forecasts; and an aged non-escheat report showing amountsthat are expected to be taken to earnings taking into accountredemption/breakage forecasts.

Referring to FIG. 16 a schematic diagram of a system configuration of anembodiment of the instant invention used to process the system for cardowners to identify and look-up the issuer of a particular card in aprogram is shown. As is shown in FIG. 16, card owners or end-users maylook-up the issuer of a particular card possessed by the end-userthrough a web portal. The web port access of portion of the ProductionData Store to associate the end-user's card number with the specificissuer. As is shown in FIG. 16, the Web Port may also be used by theIssuer to access reports and other data to which the Issuer has accessthrough the Reports Platform and the Production Data Store.

Referring to FIGS. 17 and 18, schematic diagrams of several embodimentsof system configurations of the instant invention are shown. FIG. 17shows a system configuration of an embodiment of the instant inventionin which a Issuer processes internally, through a single footprintmodel, the products and/or services that the Issuer offers and that arepotentially subject to escheat. FIG. 18 is a schematic diagram of asystem configuration of an embodiment of the instant invention in whicha Issuer utilizes a third party processor for external processing of atleast some of the products and/or services that the Issuer offers andthat are potentially subject to escheat. In the embodiment shown in FIG.18, the Issuer may process all products and/or services through thethird party processor in a single footprint model, or alternatively, ina multiple footprint model or a split issuer model, the Issuer mayprocess a portion of its products and/or services through the thirdparty processor and process another portion internally in the same orsimilar manner as shown and described with respect to FIG. 17.

The embodiments shown in FIGS. 17 and 18 are particularly well-suitedfor systems and methods of the invention in which real-time (or nearreal-time) online positioning and/or repositioning occurs. In theembodiments shown in FIGS. 17 and 18, payment processors (i.e., Visa,MasterCard, Discover, American Express, etc.)(through routers andgateway servers), ATM's and/or ATM networks, stand alone shoppingkiosks, public telephone and wireless networks (through InteractiveVoice Response systems), public Internet web sites of Issuers, and/orIssuer POS systems are connected via one or more networks (such as theInternet) to transaction servers and switches of the inventive system.The transaction servers and switches are connected through an internalnetwork to one or more application servers that analyze individualaccounts or property that may be targeted for escheat, that position orreposition individually each account or item of property and theassociated funds into parent or subsidiary accounts to achieve optimumcompliance with applicable unclaimed property laws while eitherminimizing or maximizing the amount of funds escheated to theappropriate jurisdictions, and that provide forecasting reports and/orrecommendations/instructions for revenue generating events. Theapplication servers are connected through the internal network to one ormore relational database servers for storing information for use byand/or processed by the application servers. In the embodiment shown inFIG. 18, the transaction server is connected via virtual or dedicated IPsecure gateway network connections to a server of a third partyprocessor.

In a preferred embodiment of the instant invention, differing levels ofaccess to the platform of the instant invention are provided todifferent system users. For example, access levels may be associatedwith a particular user's login account and other security requiredpasswords or numbers. System users include, but are not necessarilylimited to, administrative system users of a third party servicecompliance provider, the Issuers, card owners, escheat jurisdictions,and third parties who may have an interest in the property at issue.Levels of access to certain functions or portions of the platform mayfurther be segregated within the groups described above. For example,access to encrypted personally identifiable information received may belimited to only to the Issuer or certain third party service providers.

In the foregoing description, certain terms have been used for brevity,clearness and understanding; but no unnecessary limitations are to beimplied there from beyond the requirements of the prior art, becausesuch terms are used for descriptive purposes and are intended to bebroadly construed. Moreover, the description and illustration of theinventions is by way of example, and the scope of the inventions is notlimited to the exact details shown or described. For example, it will beappreciated that the terms such as “platform”, “service”, or“architecture” although used herein to refer to specific structures areintended to encompass components including but not limited to singlepieces of hardware, software programs or subprograms, groups of hardwareworking together, groups of software programs or subprograms workingtogether, or any combination thereof.

Although the foregoing detailed description of the present invention hasbeen described by reference to an exemplary embodiment, and the bestmode contemplated for carrying out the present invention has been shownand described, it will be understood that certain changes, modificationor variations may be made in embodying the above invention, and in theconstruction thereof, other than those specifically set forth herein,may be achieved by those skilled in the art without departing from thespirit and scope of the invention, and that such changes, modificationor variations are to be considered as being within the overall scope ofthe present invention. Therefore, it is contemplated to cover thepresent invention and any and all changes, modifications, variations, orequivalents that fall within the true spirit and scope of the underlyingprinciples disclosed and claimed herein. Consequently, the scope of thepresent invention is intended to be limited only by the attached claims,all matter contained in the above description and shown in theaccompanying drawings shall be interpreted as illustrative and not in alimiting sense.

Having now described the features, discoveries and principles of theinvention, the manner in which the invention is constructed and used,the characteristics of the construction, and advantageous, new anduseful results obtained; the new and useful structures, devices,elements, arrangements, parts and combinations, are set forth in theappended claims.

It is also to be understood that the following claims are intended tocover all of the generic and specific features of the invention hereindescribed, and all statements of the scope of the invention which, as amatter of language, might be said to fall there between.

What is claimed is:
 1. A method for determining escheat or derecognitionstatus for unclaimed property held by an issuer, said method comprisingthe steps of: utilizing data regarding an individual card that ispotentially subject to escheat; processing said data through arules-based processing platform to determine whether said card, if heldin a first entity, is subject to escheat, an amount that is subject toescheat, and a jurisdiction in which said card is subject to escheat;and positioning said card by logging in an output file with respect tosaid card whether said card, if held in a first entity, is subject toescheat, an amount that is subject to escheat, and a jurisdiction inwhich said card is subject to escheat, as determined in said processingstep.
 2. The method as claimed in claim 1 further comprising the stepsof: assigning a redemption/breakage rate to said card based upon a modelof redemption/breakage; and logging said redemption/breakage rate insaid output file with respect to said card.
 3. The method as claimed inclaim 2 further comprising the steps of: assigning a redemptiondiscounted balance to said card; and logging said redemption discountedbalance in said output file with respect to said card.
 4. The method asclaimed in claim 3 further comprising the step of aggregatingredemption/breakage rates, and redemption discounted balances for aspecific subset of cards for which such data is logged in said outputfile.
 5. The method as claimed in claim 1 wherein said utilizing,processing and positioning steps are performed upon activation of saidcard.
 6. The method as claimed in claim 1 wherein said utilizing,processing and positioning steps are performed subsequent to activationof said card and wherein said positioning step comprises the step ofrepositioning said card by logging in said output file with respect tosaid card updated information, subsequent to that which was logged uponactivation of said card as to whether said card, if held in a firstentity, is subject to escheat, an amount that is subject to escheat, anda jurisdiction in which said card is subject to escheat, as determinedin said processing step.
 7. The method as claimed in claim 3: whereinsaid utilizing, processing, positioning, assigning and logging steps areperformed subsequent to activation of said card; wherein saidpositioning step comprises the step of repositioning said card bylogging in said output file with respect to said card, updatedinformation, subsequent to that which was logged upon activation of saidcard as to whether said card, if held in a first entity, is subject toescheat, an amount that is subject to escheat, and a jurisdiction inwhich said card is subject to escheat, as determined in said processingstep; and wherein said assigning steps comprise the steps of assigningredemption/breakage rate and redemption discounted balance to said cardbased said updated information.
 8. A method for determining escheat orderecognition status for unclaimed property held by an issuer, saidmethod comprising the steps of: using two or more entities to issuecards in a single program or portfolio; utilizing data regarding anindividual card from said program or portfolio that is potentiallysubject to escheat; processing said data through a rules-basedprocessing platform to determine whether said card, if held in a firstentity, is subject to escheat, an amount that is subject to escheat, anda jurisdiction in which said card is subject to escheat; accessingprofile information relating to said program or portfolio to determinewhether said card may be held by another entity; processing said datathrough said rules-based platform to determine whether said card issubject to escheat if held by said another entity, an amount that issubject to escheat, and a jurisdiction in which said card is subject toescheat; comparing results of said processing steps to determine whetherdesired escheat status is obtained by holding said card in said firstentity or in said another entity; and assigning said card to an entityin which desired escheat status is obtained.
 9. The method as claimed inclaim 8 wherein said another entity comprises a plurality of entities,and wherein said step of processing said data through said rules-basedplatform to determine whether said card is subject to escheat if held byanother entity comprises: processing for each of said plurality ofentities said data through said rules-based platform to determinewhether said card is subject to escheat if held by each of saidplurality of entities; and wherein said comparing step comprisescomparing results of said processing steps to determine whether optimalescheat is obtained by holding said card in said first entity or in anyof said plurality of entities.
 10. The method as claimed in claim 8further comprising the step of logging results of said processing,comparing and assigning steps into an output analysis file.
 11. Themethod as claimed in claim 10 wherein said output analysis file isstored in a production data store.
 12. The method as claimed in claim 10wherein said output analysis file is utilized by a reports platform togenerate reports regarding said processing, comparing and assigningsteps.
 13. The method as claimed in claim 12 wherein said reportsinclude state escheat filings, escheat notices to purchasers orrecipients of said cards, and audit responses.
 14. The method as claimedin claim 12 wherein said reports are provided to an entity for whichsaid program or portfolio has been designed to benefit.
 15. The methodas claimed in claim 12 wherein said reports are stored in a businessdata store.
 16. The method as claimed in claim 8 wherein saidrules-based processing platform includes the steps of: determiningwhether sufficient information is available from said data to apply afirst priority rule to said card; and if sufficient information isavailable: determining a jurisdiction law profile within a jurisdictionlaw database to apply based on said information; utilizing saidjurisdiction law profile to determine whether at least a portion of saidcard is subject to escheat within a first jurisdiction; determining anamount of said card that is subject to escheat within said firstjurisdiction; logging said card as subject to escheat and logging saidamount in an output file associated with said card; if sufficientinformation is unavailable, or if said card is not subject to escheatwithin said first jurisdiction: determining a jurisdiction law profilewithin a jurisdiction law database to apply based on a domiciliaryjurisdiction of the issuer of said card; utilizing said jurisdiction lawprofile to determine whether at least a portion of said card is subjectto escheat within said jurisdiction in which said card is held by thefirst entity; determining an amount of said account that is subject toescheat within said jurisdiction in which said account is held by thefirst entity; logging said card as subject to escheat and logging saidamount in said output file; if said card is not subject to escheatwithin said jurisdiction in which said card is held by the first entity:determining a jurisdiction law profile within a jurisdiction lawdatabase to apply based on a jurisdiction in which the transactiongiving rise to the card occurred; utilizing said jurisdiction lawprofile to determine whether at least a portion of said card is subjectto escheat within said jurisdiction in which said card was sold;determining an amount of said card that is subject to escheat withinsaid jurisdiction in which said card was sold; logging said card assubject to escheat and logging said amount in said output file; if saidcard is not subject to escheat with said jurisdiction which said cardwas sold, logging said card as not subject to escheat in said outputfile.
 17. The method as claimed in claim 8, further comprising the stepof obtaining a batch of data regarding a plurality of individual cardsthat are potentially subject to escheat, and wherein said utilizing,processing, accessing, comparing and assigning steps are performedseparately for each individual card.
 18. The method as claimed in claim17, further comprising the step of logging individually with respect toeach card, results of said processing, comparing and assigning stepsinto an output analysis file.
 19. The method as claimed in claim 17further comprising the step of processing said batch of data through aforecast engine to estimate a redemption discounted balance for thecards that have been determined to be subject to escheat but which willbe redeemed prior to escheatment.
 20. The method as claimed in claim 8,wherein said card is selected from payment instruments that useelectronic systems or devices to carry out payment including: magneticstripe cards, chip based cards/devices, and wireless phone chip devices.21. The method as claimed in claim 20, wherein said card is selectedfrom the list of: prepaid cards, stored value cards, gift cards, creditmemo accounts or cards, loyalty or affinity points or cards, rebates,promotional cards, awards or incentive points or cards, health savingsaccount cards, government benefit cards, payroll cards, per diem cards,prepaid minutes from wireline or wireless telephone companies,electronic coupons or certifications, and mobile chip payment systems.22. The method as claimed in claim 20 wherein said card comprises astored value card.
 23. The method as claimed in claim 8 wherein saiddata includes said profile information.
 24. The method as claimed inclaim 8 wherein said data includes facts concerning said program orportfolio.
 25. The method as claimed in claim 8 wherein said dataincludes client directives relating to said program or portfolio. 26.The method as claimed in claim 8 wherein said utilizing, processing,accessing, comparing and assigning steps are performed separately foreach individual card on a real-time or near real-time basis.
 27. Amethod for derecognizing liabilities for unclaimed property held by anissuer, said method comprising the steps of: obtaining a batch of dataregarding a plurality of cards that are potentially subject to escheat,said data including information regarding account activity for eachindividual card; processing said batch of data through a forecast engineto create a model of redemption and/or breakage associated with saidcards, said model being created by analyzing said information regardingcard activity in association with one or more predictors ofredemption/breakage; utilizing said model to determine an estimate of anamount from one or more of said individual cards that may bederecognized at a given time period; derecognizing said amount.
 28. Themethod as claimed in claim 27 wherein said one or more predictors isselected from the group consisting of: age of cards, amount remainingand/or amount activated on a card; location where a card is sold orwhere a purchaser/recipient reside; type of card; sector in which a cardmay be utilized; information regarding the card purchaser/recipient; andwhether the card has been used or never been used over a certain periodof time.
 29. The method as claimed in claim 28 wherein said one or morepredictors comprises age of a card.
 30. The method as claimed in claim29 wherein said processing step comprises the steps of: compiling cardactivity into a database to create a transaction triangle thatsummarizes card activity based on age of cards; utilizing saidtransaction triangle to create a balance triangle database that recordsan expected balance as a percentage of the original activated balance ofa card based on the age of the card.
 31. The method as claimed in claim27 wherein said model provides a measure of breakage.
 32. The method asclaimed in claim 27 wherein said model provides a measure of whetherredemption and/or breakage is changing over time.
 33. The method asclaimed in claim 27 wherein data that makes up said model is stored inan output analysis file.
 34. The method as claimed in claim 33 whereinsaid output analysis file is accessed by a report engine to createreports to the issuer regarding breakage and/or whether redemptionand/or breakage is changing over time.
 35. The method as claimed inclaim 31 wherein said measure of breakage is selected from the groupconsisting of: arithmetic breakage, slope-determined breakage, andterminal breakage.
 36. The method as claimed in claim 27 wherein saidstep of derecognizing includes the steps of: reconciling a differencebetween said amount derecognized and an amount from one or moreindividual cards in which the likelihood of redemption is determined tobe remote; and derecognizing said difference if positive or recapturingsaid difference from income or earnings if negative.
 37. The method asclaimed in claim 36, further comprising the step of storing dataregarding said reconciling step in an output analysis file in aproduction data store and creating a report from said output analysisfile to instruct an issuer on said taking to earnings steps.